Legal Question in Credit and Debt Law in California
Money Owed on Credit Card
I ran into a hardship and was unable to pay my credit card bills for a few months. After a bunch of nastygrams, I sent a certified letter (made a copy) to each credit company. In the letter I said that I was unable to pay the min. balance of $300-400 a month, but I would pay $25.00 a week until I get current. I also told them that I would not use the cards until they said it was ok to do so. I have paid every week for two months now, but one company has said that they sent my acct. to collections and wants the full amount, I don't have that. I'm still paying the credit company every week. What do I do?
2 Answers from Attorneys
Re: Money Owed on Credit Card
either look to a bankruptcy or just keep doing what you are doing. Most of the time they will not do anything except make a lot of noise if they are getting some payments.
Re: Money Owed on Credit Card
You may wish to contact a company like "Consumer Credit Counselors". They will work with creditors to work out payment programs that will be abided by.
Bankruptcy should be a last resort. It will last 10 years on a credit report, and a decent home loan will be out of the question for at least 4 years. Slow payments (with a reasonble excuse) are not nearly as bad, and you can get a good home loan as early as one year after re-establishing credit.
Finally, work with the collection company as you did the other credit card companies. I would also recommend that you have plastic surgery ... cut up your credit cards. You may want to keep one, just so you maintain a credit history. You might consider taking the one with the lowest balance, and continue to make minimum payments on that one. That way, once you are back on your feet, you will still have access to a credit card.
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