The woman is 60, recently laid off. She had worked for a company for 25 years and does not expect to return to her job. She has debt to a couple of credit card companies totaling a “few thousand” dollars. She attempted to work with the companies but they refused to listen to her. She explained her situation, that she wouldn’t be able to pay what she had been doing while employed. Still they wouldn’t listen to her. She offered to pay half owed them. Again a refusal.
What should she do? Perhaps not pay them? She knows she never will be able to repay the total debt. Not paying and putting what she would have paid them into a savings account and then waiting a few months before offering to pay an amount she now can choose to do, on her own terms. After all, some payment is better than nothing, don’t-cha think? She knows her credit history will start to repair itself after a couple of years.
She tried to do the honorable thing. They were her debts. No one was willing to help her out. As far as she was concerned, she did the only thing she could do.
You just lost your job. Your spouse died. For whatever reasons, you are now unable to meet your monthly debt obligations and will have to now decide who to pay and who to “put on hold.”
Credit cards are unsecured debts. That means there is no collateral involved. The credit card company cannot repossess your home, your car or anything else of value when you have unsecured debts. So what are you to do if you cannot pay everyone?
If you have fallen behind in credit card payments, NEGOTIATE. (After all, the government helped attempt to bail out the credit card companies. The least these companies can do is help you in your time of need.)
Tell each and every credit card company what you are able to pay each month. Let them know why you are unable to meet the full monthly payments and that you do want to pay but cannot at this time. There are some companies that will work with you and some that may actually “write off” a certain amount of your owed debt in order to help you out.
If your negotiations have been met with success, NEVER miss a payment. Remember…the credit card company made these adjustments in good faith. You will need to keep your end of the agreement.
If the credit card company you owe money to is unwilling to make adjustments, than let them know you will take your chances with the bill collectors at pennies on the dollar. You tried.
I can remember going to Carl’s Jr. for dinner last week. The bill was going to be $7.98. I asked to have a side order of onions. “That will be an extra $.25.” You’ve got to be kidding, I replied. She was willing to risk losing a $7.98 sale over a slice of onions. I walked out. She lost. Not only for herself but for Carl’s Jr. Sometimes being a bit foolish has no place in these hard economic times.
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