If you are unable to make credit payments, you may need to contact your creditors and ask for a payment plan. Many creditors may be willing to work out a payment plan that fits your budget. If not, you can look into other options such as debt consolidation or a debt relief program.
Contact your creditors, outline your situation and ask them to suggest ways to help solve your problem. They may agree to a better deal that lets you pay your debts by charging a lower interest rate, writing off interest or giving you more time to pay.
While debt collectors can no longer have you jailed or threaten to have you arrested for not paying your debts, there are a few instances in which you can be incarcerated with debt as the underlying cause. For example, a debt collector can sue you and, if you fail to comply with court orders, you could get jail time.
The charge-off remains on your credit report, but the collection account will show up on your credit report under Collections. The collection agency might sue you to get payment. Depending on the outcome of the lawsuit, the court might put a lien on your home or garnish your wages to repay what you owe.
Specifically, the rule states that a debt collector cannot: Make more than seven calls within a seven-day period to a consumer regarding a specific debt. Call a consumer within seven days after having a telephone conversation about that debt.
Debt collectors are not permitted to try to publicly shame you into paying money that you may or may not owe. In fact, they're not even allowed to contact you by postcard. They cannot publish the names of people who owe money. They can't even discuss the matter with anyone other than you, your spouse, or your attorney.
When it comes to credit card debt relief, it's important to dispel a common misconception: There are no government-sponsored programs specifically designed to eliminate credit card debt. So, you should be wary of any offers claiming to represent such government initiatives, as they may be misleading or fraudulent.
If you are unable to pay your debts or reach some settlement on them, you may benefit from bankruptcy. Depending on your assets and income, bankruptcy can either cancel (discharge) your debts, or allow you to create a partial repayment plan and discharge your debts at the end of the plan.
Debt Consolidation Loans
It is a way of consolidating all of your debts into a single loan with one monthly payment. You can do this by taking out a second mortgage or a home equity line of credit. Or, you might take out a personal debt consolidation loan from a bank or finance company.
There are often two main reasons for financial hardship : 1. You could afford the loan when it was obtained but a change of circumstances has meant you can no longer afford the repayments; or 2. You could not afford to repay the loan when it was obtained.
Debt collectors cannot harass or abuse you. They cannot swear, threaten to illegally harm you or your property, threaten you with illegal actions, or falsely threaten you with actions they do not intend to take. They also cannot make repeated calls over a short period to annoy or harass you.
It's possible to serve jail time if you've failed to pay your federal taxes or make child support payments. You can't go to jail merely for owing credit card, student loan, personal loan or other types of debt, which we'll explain below.
You can outsmart debt collectors by following these tips: Keep a record of all communication with debt collectors. Send a Debt Validation Letter and force them to verify your debt. Write a cease and desist letter.
If you are struggling with debt and debt collectors, Farmer & Morris Law, PLLC can help. As soon as you use the 11-word phrase “please cease and desist all calls and contact with me immediately” to stop the harassment, call us for a free consultation about what you can do to resolve your debt problems for good.
Most states or jurisdictions have statutes of limitations between three and six years for debts, but some may be longer. This may also vary depending, for instance, on the: Type of debt. State where you live.
Avoid negotiating over the phone with your creditor. Don't look too eager to settle. Make it clear to the creditor that you intend to pay the debt. Explain that you are unable to pay the debt due to (detail your hardship).
There aren't any free government debt relief programs for credit card or personal loan debt other than bankruptcy. Many types of government debt relief exist in the form of grants and low-interest loans for specific purposes.
There is no minimum amount of debt required to file for bankruptcy. Because of legal fees and long-term financial consequences, it may not be worth filing with less than $10,000 in dischargeable debt. Filing for bankruptcy is best reserved as a last resort because it is expensive and will damage your credit.