I owe 6000.00 on my American Express Credit card and I dont have a dime to pay on it.?

Question

I havent made a payment in 3 months and I dont know what to do because the money is not there to pay it. Please help. I am desperate. They are calling me like crazy and I need to know what is going to happen cause I cant pay them. We've fallen on very hard times. I am scared it will affect the status of our home.

Answer 1

This kind of question is asked all the time here, you are not alone in this.

First off your home will be unaffected, unless you have a variable rate interest loan of some sort that is linked to your credit score.

What follows is a shameless cut and paste from another of my answers that speaks to your question rather directly.

(begin cut and paste)
I see the range of answers here, from the judgemental to the slightly helpful. I will answer your question and go a step farther.

Here is the reality check:

Not much, if anything.

A small part of your wages can be garnished, but the process of doing this is very complicated and almost never done to my knowledge.

Credit card debt is what is called "unsecured" debt, that is it is not secured by an asset such as a house for a mortgage loan. In a secured loan, such as a mortgage, you legally pledge to give up a readily seizable asset like the house in case of default. This is why home loans, and other secured debt generally has a lower percentage rate, i.e. the loan is less risky from the lender's perspective.

Your credit card, on the other hand has no such guarantee on your part. If you don't pay, they have no assets that have been pledged to seize. This severely limits the actions that credit card companies can undertake.

Realistically here is what will very probably happen:

They will charge you a NASTY amount of fees and interest, and then after a certain period of time, sell the debt to a collection agency at a loss and write off your debt from their books.

The collection agency then will "step into the shoes" of the credit card company and do all manner of things to convince you to pay them back. The collection agency will also probably add some sort of penalty or interest to what they say they say you owe.

Ultimately, they can't do much other than pester you, although THAT can be HIGHLY irritating. Be sure to read your rights and what is legal at the links at end of this answer.

BUT

You did borrow the money, and ethically should make an honest attempt at paying it back. If you do so, you will be better off in many regards.

That said, you can at any point, negotiate the terms and settlement.

Given the choice between no money and some money, what do you think the credit card company/collector will choose?

With the knowledge that there is ultimately nothing they can realistically do to you, all the bargaining power, and ethical responsibility is on your side.

You might not be able to pay all of it back. This is ok, but do try to tell them honestly what you CAN pay back.

There are lots of good self-help websites that can teach you how to budget so that you can get an idea of what you can afford to pay back. Be realistic and honest, and make a good faith effort to pay off the debt, and you will be surprised at how quickly those penalties and interest rates go away as the credit card companies understand that it is better to meet your terms than not get anything at all.

Regarding garnishment. You will note that the law says "25% of disposable income". This is why garnishment is so rare: How do you prove "disposable" income in court? If you are in so much trouble with debt that you can't pay it back, chances are your "disposable income" is non-existant. 25% of nothing = nothing, and lenders know this.

BOTTOM LINE:

You can ignore credit card debt if you REALLY want to, but you should pay it back, and if you ask and negotiate honestly with them, can probably get terms you CAN afford.

Answer 2

Here is something I did just to delay a payment, but it will slightly lower your credit score: I opened two separate credit card accounts and was able to get 0% financing and no transfer fees on both cards until April 2008. I had a $3000.00 balance of which I transferred $1500.00 each to the new credit cards. It's possible to bounce credit card balances around for a while without having to actually make a payment. And having a 0% interest rate wont accrue any finance charges. But at some point you will have to make at least a minimum payment. Also, you could talk to the company and threaten bankruptcy, but they may require a copy of the paperwork; however, they may be willing to work with you because if you file bankruptcy, they know that they getting substantially less than the 6000.00

Answer 3

You take care of essentials first: food, clothing, shelter, utilities. Send them something of what is left.

Call them a strike a deal. Tell them you understand you owe the money, but have none right now. You want to pay the debt, but have to do it over a period of time. They won't like it, but if you're willing to show a good faith gesture they may be willing to work with you.

Get a second job delivering piazzas or something for a while. You can know 6000 out fairly quickly if your on a budget and have a second job.

If they become abusive then tell them the two of you can talk like adults or they can talk to a dial tone. If they try calling everyday, tell them you'll talk to them once a week or so and them let them talk to a dial tone.

Here's what you DO NOT do. You do not send them post dated checks. They'll cash them immediately and the bank won't notice. You do not give them access to your checking account. They will clean you out.

Remember they will do and say anything to intimidate you or scare you into paying them instead of paying for food. Familiarize yourself with the fair debt collections practices act. That's the law they are suppose to abide by.
http://www.ftc.gov/os/statutes/fdcpa/fdcpact.htm

Answer 4

Why did you rack up 6k without being able to pay the min payments on it?

You are going to have to figure out a way to maky your min payments. Which should only be about 120 a month. If you have to borrow for a few months ..so be it. Or get a job where you can make the whopping 120/month you pay the bills.

Answer 5

Don't just ignore it. I think your best bet would be to call them and tell them. Perhaps you could set up some sort of payment plan that would keep them from calling you all the time and protect your credit rating. It would be very helpful if you could scrape up some money to send them to show your good intentions. Do you have a relative or friend who would be willing to lend you some money?

Good luck.

Answer 6

Calls will increase, at some point your current credit will suffer, they will eventually get a judgement against your for the balance in full as well as interest and court fees; they will file a lien against your home making it difficult to re-fi and impossible to sell without paying and in some states, they may be able to file a garnishment against salary.

Work something out with them. They aren't going away.

Answer 7

You are in deep. You are in Financial Hell without a fire extinguisher. Call Amex and talk to them. At least you will learn their position and they, yours. Get help to structure your income, spending, debt, etc so that you can pay your way out. If you are expecting free money, your desperation is just the start.

Answer 8

First, try to make any payment you can...even if it's below your minimum. Seek the help of a local, nonprofit financial agency. They're free and always give great advice. Good luck with all your endeavors.

Answer 9

pay it your lack of planning effects many more people then just yourself. pay your bills and stop dragging the rest of us into your problems. did you ask anyone for help when you were charging it up. if you didn't have the money for the items then. what made you think you ever would. wish the would bring back debtor prisons

Answer 10

Some credit card companies have a deferrment option, you might want to look into it. Creditors are usually pretty ruthless. They want their money and are persistant. You'll have to look into the options offerred by your plan.