Creditors calling with no money.?

Question

I have creditors calling to collect on debts that I have incurred about 3 - 5 years. The toal sum is about $3000. Two of the three are threating to take me to court or take legal action. I legitmately do not have the money. I have a house payment. I have two car payments since me and my wife both work. After those major bills and the gas/light etc.. I put about about 10% of my income for retirement. After that bills and food I have only about 150 left for distrcretion. I have explained this to the creditors and they all want at least 100 a month. When I tell I don't have the money. They reply with "so your refusing to pay?" comments. One even told me "stop lying I know you make enough."

I am sick of this. I have no problem paying, but if I don't have it I don't have it. I am thinking about taking off a long large enought to pay off my one car (about $5000, so about $9000 with all the bills) and outstanding debts.

Any advice or insight to how I solve this?

Answer 1

First, collectors will try to get you ticked off so you pay (i.e. "stop lying we know you have the money"). Don't allow them to make you made enough to write a check or give them access to your account when you don't have the money.

Second, you legitimately owe the money so you need to pay them back. I would not advise getting a loan. Instead, first try to settle each debt. Make them an offer. For example, if one collector says that you owe $1,200 then offer them $800 as settlement in full. You want to get that in writing (from them) that this agreed amount will settle the account.

This all depends on how much money you can gather though. Is there something you can sell, take on an extra job or some way (other than borrowing the money) that you can settle this debt?

If not, then you need to manage each debt individually. Create a budget and tell them how much you'll pay them each month. Don't allow them to harass you into paying more. Don't allow them to abuse you on the phone. Don't give them access to your account or postdated checks. NEVER!

Finally, consider what you've learned from this experience. You're credit must be trashed because you were late on payments until it went into collections. This will be on your record for sometime.

Because of poor credit, you will pay more in insurance and interest rates. It could possibly affect your ability to find work (as many employers check your credit report these days).

Scott......

Answer 2

If you have no money to pay, just tell them that. It won't stop the calls. Eventually, the credit cards will charge off your account around the 3 to 6 month point and the account will go to collections. Some credit cards like Capital One have their own in-house collections which are very aggressive in collecting defaulted accounts. Others will sell the debt to a collection agency. In either case, you could be sued. Aggressive credit card companies and many collection agencies are now suing for even relatively small amounts. They would win a judgment which is good for a long time and can be renewed. Your best option is to find a job even if it's fast food and come up with money to pay off the creditors.

Answer 3

Debts are not a problem - until we can't pay them.

Looking at getting a better interest rate by refinancing some loans you have is a good idea, maybe you can go further in this path.

Maybe it's time to change some habits to save money. Or finding a sideline job that will bring the 150 $ a month you need to get rid of these creditors.

Some credit cards will give you a 6-months interest free promotion when you apply - it may be a good idea ! (6 months on a 3000$ card at 12% is 180 $ !)

Good luck !

Answer 4

Well, the only legal way to get them off your back is filing for bankruptcy.

Trust me, the creditors dont care if you have other payments to make. Shoot, you could have a sick child in the hospital, and they still wouldnt give a crap!

Most collection agents work on commission and will do anything to get you pay up. They are trained to treat you like a file number, not a person. Their salary depends on it.

Answer 5

If you own your home and have a good income, look into the possibility of a debt consolidation loan.

You can also contact a credit counselling service. They can help you deal with creditors.

Or you can also ask your creditor if they have a repayment plan or some kind of assistance in repaying the debt.

Answer 6

Sell one car and stop investing in retirement. Once the bills are paid off then think about the retirement plan. You can't borrow yourself out of debt. Maybe you will need a second job until the bills are paid.

Answer 7

I'd suggest taking out a loan, possibly a home equity loan to pay off your car loans and the 3,000 in credit card loans. Then toss those credit cards away. This way you'll have one bill instead of five and if there's extra money, put it into the loan to pay it off earlier or just refinance your mortgage to pay for all those bills.

As for $150 left over for "distrcetion"....you're a lucky man. Save that for car repairs, extra money it'll cost to heat your house.

Well...food for thought. Good luck there!

Answer 8

The best alternative for you is the following....
Bankruptcy law provides for the development of a plan that allows a debtor, who is unable to pay his creditors, to resolve his debts through the division of his assets among his creditors. This supervised division also allows the interests of all creditors to be treated with some measure of equality. Certain bankruptcy proceedings allow a debtor to stay in business and use revenue generated to resolve his or her debts. An additional purpose of bankruptcy law is to allow certain debtors to free themselves (to be discharged) of the financial obligations they have accumulated, after their assets are distributed, even if their debts have not been paid infull.

http://www.law.cornell.edu/wex/index.php/Bankruptcy#bankruptcy:_an_overview

Answer 9

Collectors are the scum of the earth. they will lie, cheat and yes even steal if you give them your checking account number. Tell them to only contact you by mail, they have to abide by that. Go to daveramsey.com and research his program and some of what he has to say. I went to Books a million and read it there, you can get out of it, it is hard, I paid off 18000 in 18 months, but let me tell you, like he says, its beans n rice most of the time.

Good luck

Answer 10

Sounds like you need a lawyer, but as far as I know the phone calls are harassment.

When they call ask for their phone number, tell them you will get back to them (hopefully they have an 800 number)

Then call them back, over, and over, and over again, tying up their line, tell them the simple message, don't call me, if they refuse keep calling.