I have had my income cut! Now all my creditors want their money. I want to pay, but don't have the income right now. They call 20 times a day. I have told them, but they still call. What can I do? I will pay when I get back on my feet. I need advice. Please help.
By netter from MI
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There are several things you can do. You can get free credit counseling through a consumer credit counseling service. (do not ever pay for credit counseling) To find a free service in your area, type in "free credit counseling/your city and state" in your search box.
The second thing you can do is contact a lawyer that handles bankruptcy. The first visit to this lawyer should be free, and they will counsel you on the best option for your situation. Once you file for bankruptcy, if that is what you choose to do, all collection activity will have to stop. That is the law. Good luck!!!
Most of credit counselors that I have heard of won't help you unless you have a certain amount of income. From what different people have told me it costs $1,000 to file bankruptcy.
Patty Lynn is correct. CCCS (Consumer Credit Counseling Service) is the company that credit card issuers actually work with and support. They will come up with a plan and a monthly payment that you send in and they distribute to your creditors. If they feel that, based on your income and debt, you would not be able to pay back the full amount within 5 years, they may recommend bankruptcy as a last resort. But they will work with you and help you evaluate your particular situation. They are not at all judgemental, and generally they get your interest rates reduced and all late fees, etc waived. You do NOT want to go with any company that claims to get rid of your debt or reduce it - if you do this, the credit card company will likely come back and sue you for the difference. I would give you the link for CCCS, but it is different in each state, so just Google it. Good luck! They really can be a lifesaver, and you will feel much better once you talk to them.
Netter, after my post I noticed you are in Michigan so I checked for you, but there are a lot of look-a-likes out there. The CCCS you want will be affiliated with the National Foundation for Credit Counseling. Here is there website, and they can help you find the appropriate non-profit agency that can put you on a Debt Management Plan or DMP.
Unfortunately, in this current economy a lot of people are in the same boat with you. I wish you the best of luck!
OK, a couple of things you should do: First, next time they call, tell them explicitly not to call you again. By law if you tell them that, they cannot call you any more, they can only deal with you through the mail. In writing there can be no he-said-she-said. Second, forget the collection agency. You are under no obligation whatsoever to pay them anything. Call the company you have the original debt with, and set up repayment with them. Ignore the collection agency. If they call, hang up on them. I repeat: you are under no obligation of any kind to pay them anything, your debt is with the company you owe, not the collection agency.
Deal only with the company you owe the debt to. Finally, find out where the collection agency is located, and report them to the local better business bureau and local Federal Trade Commission office. In writing.Then pay your debt off *with the company you owe it to* and be done with it. There is $1000 fine for that collection agency each time they violate your wishes and call you. Report them each time they do it and get the person's name who's doing it.
(A relative of mine works for a collection agency and she says the laws are strict about harassing people with phone calls)
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First, a little humor to make you chuckle a little. Tell your creditors to call Jennifer Granholm and have her cut you a check. She's screwed you out of quite a few tax dollars. Then send a letter to GM and say "thanks a lot for being greedy pigs guys, now the rest of us hard working stiffs gotta pay."
On a serious note, consider debt consolidation/credit counseling. as long as you still have some income, companies should be willing to work with you. I would recommend searching for non profit debt agencies to help.
Also, tell your creditors when they call you that you've told them your story repeatedly now and that their calls have become harassing and they need to stop. if not, you'll contact an attorney. it is against the law for them to harass you. Michigan is an extra tough economy right now. Hang in there and network with others as much as possible.
Lastly, God be with you.
One thing to not do, do not call credit counselors who advertise on tv! They are a scam and will take your money and never pay anything on your debt. I know someone who tried that and we finally got their money back, but remember, it is a scam!
If you have no income, there is nothing a debt counselor can do for you and you may have to declare bankruptcy. Check in your city to see if you have Legal Aid offices, they offer free legal services and you may be able to declare bankruptcy for court fees only. At the very least they can tell you what your options are.
If you do not have Legal Aid, you might still call an attorney, they usually offer the first hour free and most of them are required to offer pro bono services and you might just be the one to qualify for them.
I listen to Dave Ramsey on am radio. You can call him and he will get all your details then advise you on how to deal with this. He will even tell you exactly what to say to each person you deal with. He really gives you confidence and a good plan on how to move forward! Good Luck!
Check out the website www.wishuponahero.com. Maybe someone there can help you out. Good luck. :-)
Bankruptcy is very expensive since the new laws took effect five or so years ago! Listen to Dave Ramsey, he is great! Don't talk to your credit collectors, they can only talk to you once a day. The problem is, if they harass you, they want a reaction. Don't give them a reaction. Just say I have no money right now and hang up!
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How do you deal with your creditors when you can't pay the full amount, if you have lost your job etc.? I try to explain, but most want money no matter what? I did get one card closed and a low payment plan, but only one would do this for me.
By deLadyBex from Staten Island, NY
They're trying to stay afloat also but everybody has to take care of themselves. All you can do is all you can do. Make a statement of when you intend to pay and how much and just tell them that is absolutely all you can do. They'll have to take it. They might not like it but in my experience dealing with the public businesses would rather get something than nothing. (05/08/2009)
Read the book Get out of Debt and Stay Out of Debt by Gerrold Mundis (based on the DA anonymous program). He recommends that you just keep on sending in what you can anyway. And keep on doing it on a regular basis - the only thing I would worry about is their tacking fees on - There are debt management services that are non-profit that help you make a minimum amount. (05/08/2009)
Please use caution if working with a 'non-profit' debt management/credit consolidation service. Some charge hidden fees or don't live up to their promises while others ask for donations to "help them stay afloat."
Do some reading at http://www.ftc.gov in the "consumers" section before making a decision to work with such a service. There are so many scams out there! (05/08/2009)
It's been my experience that dealing with card companies over the phone is always to their benefit and not yours. The person on the other end of the phone seems to have a script they have to stick to. Try to deal with them in writing, and let them know what you want, lower interest rates, no late charges, etc., and also tell them the maximum amount you can pay each month. I did this with one card company for several months before they made me an offer I could live with.
Now that congress is planning on cracking down on credit card companies, a lot of them are making offers to their customers to settle their debts. I had two small accounts that I stopped paying on, and the creditors offered to settle my accounts for half of my balance. Discover Card has a new web site: www.cardmemberassistance.com where they give you three different (and reasonably) options for settling your account. It might not be too long before the other card companies follow their lead. (05/09/2009)
By Patty Lynn