Serious Credit Card Debt! What should I do?

Question

I am a student with about 3 years left of school before I start making money and I have some serious credit card debt! I owe about $12,000 to Visa and about $7,000 to AMEX. Most of that money has gone to tuition, books, & fees not covered by aid and loans.
I have been reading other post about this matter and am kind of confused. Should I contact the creditors before they go to a collection agency and try to work out some kind of deal (like litterally pennies on th dollar)? How long before they sell the account to collections? I want to call them tomorrow- I've been avoiding their calls like the plague! How do I clear this up? Can I?

I have no income but my parents offered to help as much as they can. If they take me to court what can happen (supposedly I already have a case number) since I have nothing and no income? I've heard some people say that when I call them I should say something like, "I'll pay you *** if you agree to take this off of my credit report." Can I really do that?

Answer 1

Call them right away and make some kind of arrangements for payment. Most likely, they won't accept pennies on the dollar. Have you been served with a law suit? If so, make sure you show up in court and show that you've been making minimum payments. But, make sure you've been making them. The case number thing might be a ploy. If you haven't been served, now's the time to start to settle with them, before they go to collection. This will ruin your credit for approximately 7 to 10 years. Take care of it.

Answer 2

You've been putting this off for way too long. Take your mom or dad and go see a credit counsellor. In Ontario, this is a free service provided by the government.

Some quick remedies:

1. By all means YES, contact them, get an agreement in writing to continue paying down your debt. A collection agency will be a black mark on your credit score for the next 7 years. A nasty blemish for someone just starting out in the big bad world.

2. Can your parents rework their mortgage to pay off your debt? But you MUST MUST MUST cancel ALL cards and not open any new ones once the debt is erased.

3. Can you get a consolidation loan from a bank, and ONLY a bank? Again, close ALL cards once they're paid off.

4. Try to put 10% of the debt down on each one every month. Time to get a part time job. Once you get below the next $500 mark, have your limit reduced so you can't rack it back up again.

Good luck.

Answer 3

Just to have that kind of debt means that someone has cosigned for your credit cards at some point in time so your parents may be on the hook if you get off the hook. If you have no income then a settlement is out because you cannot pay with what you don't have. If you are $19K in debt and you still have 3 years left of school, you've got a rocky road ahead trying to get out of college without a job and not having access to credit. I have a feeling that your parents either cosigned or put their home or other assets up for collateral on your credit cards which means you really need to talk to them about your issues. You're young so you can recover from this experience but it'll be seven or so years and you'll need employment. Even a credit management company won't talk to you without a source of income. If you don't address your situation, your creditors and collection agencies will. You can be forced into bankruptcy which can affect your ability to get insurance, rent an apartment, qualify for future student loans, and even get a job. Your credit report says alot more about you than you realize. Don't put this off... get some legal assistance from your student advisor's office, from your parents, from your creditors, or wherever help will come. The problems are not going to go away and will only worsen over the next 3 years of college.

Answer 4

Debt settelment is designed as an alternative to bankruptcy .You may want to look into it. There are good programs out there you just have to do your research look up www.ripoffreport.com see what negative feed the company has. The BBB is not reliable enough. So many debt settlement companies do not practice with integrity or ethics, but the right company is a life saver. also make sure they explained the program thoroughly and that in their contract they take 15% or less for their services.Make sure they are licenced to work in your state. Don't go with a company that puts your money in an umbrella account. It takes a certain kind of licence to have client funding accounts set up and their are only 2 banks in the U.S. the FTC regulates and set aside for this purpose. Also make sure that they figure each debt individually at 44% and that the difference between what you paid into your account and what actually is paid on your debt goes towards your next principle. When it comes to your debt program it is very important to shop, the best price is most likely not the best company. A good settlement company will only take your first two payments to set up account. If they take more then the first two then they are deemed predatory and are more concerned about getting their money then they are about helping you. Know the laws in your state every state is different. Ask them worst case scenario. Also never do a program longer then 36 months. Dave Ramsey is an excellent guide but he and what we do are two different things. Debt Assistance programs were set in place to deal with aged collections, alternative to bankruptcy and for people that are totally overwhelmed. It is a hardship program. If the company you choose is legit one thing they will ask for is your story. They take your story to the creditors on your behalf, does make a difference. One last thing if your debt is 7 years old then the collectors who have it didn't pay anywhere near 100% for it chances are they paid 12-22 cents on the dollar so don't pay them full price back. Hope this helps.
Kourtnie Donihoo
Debt Advisor
The E.D.A. Group
866.605.0753

Answer 5

Man, you MUST get a job, even if it is part time. And I though my credit cards were bad at age 31? Wow. Call In Charge Debt Solutions AFTER you get a job. You need to have a job and steady income (even if it is $ 400 or $ 500 a month- it is steady!) before you can get on the debt managment program with InCharge. You only pay $ 50.00 to sign up and after that you have a choice of contributing to the non-profit agency. I paid 7 $ a month (monthly contribution) and then I asked them to take it down to 4 a month. My payments were about $130.00 a month and I had about $ 6,000 in total debt. You can pay more if you want to. Just don't miss payments. I missed about 2 payments back in Jan of 2006 and they dropped me since I didn't get any shifts in from Oct-Dec 2005. First thing is first. Get a job! You don't have to stay there. remember-it is just temporary and it is to get these bills paid down!

Answer 6

Call them and offer to pay every month what you and your parents can afford. Never miss a payment.

Go to a credit counsellor. You should have consolidated your credit card debts into one low interest loan. Maybe too late now. The credit counsellor will know how to deal with that.

Smile, you are alive, healthy, young.

Dead is bad. Alive with a few debts and issues?? Welcome to the world.

No small claims judge will fault you if you can show that you have been making steady payments and trying to work it out.

Answer 7

$19,000 of CC debt plus student loans and still 3 years to go. Dude, you're in denial. What casino did you go to? How much have you been drinking? I'm sorry, I don't know what your issues are but you really need to reconsider choices you're making. That's way more important than getting sued by a credit card company.

Answer 8

The first thing you need to do is get a job. Creditors will be a lot more willing to work with you if you have a way to pay them back.

The second thing you'll need to do is to talk to a credit counselor. There are many that offer their services gratis, and they'll be able to help figure out how you can pay off your debts.

Answer 9

You can Scare them and tell them your going to go bankrupt if they dont cut your loan. What creditors sometimes do is give you a reduced settelment, its better for them to get some money than none at all, if you owe $19,000 talk to them and scare them and tell them you dont know what your going to do and maybe even tell tehm you decided to declare bankrutcy and are in the process of getting a lawyer. Trust thei'll call you back with options, which they never give when their trying to collect the money until they hear bankruptcy. You may negotiate with them and end up paying
$9,000 wich is more manegeble. But it will show on your credit report if you default on a loan, but its not as bad as bankruptcy

Answer 10

Been there, done that, I had to quit school to save my credit and pay the bills down.

If you ain't got it they can't get it. but they will trash your credit.

Not the end of the world. Credit can be repaired, but you need to call them now.

Gee, I hope Mom didn't co-sign.