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What Can I Do If I Can't Afford My Credit Card Debt Anymore?

I can no longer afford my credit cards what can I do? Can they put a lien on my home or car?

Hello, I'm coming to a point where I'm not able to make my payments on several credit cards totalling to around $25K. Most are with one bank institution $18K for several CC accounts. My only two options now are defaulting forever or bankruptcy. I'm not too worried about the nagging from collection agents, but I'm worried about my house. I need to know what could happen for each of those situations. Can a creditor get a court order to put a lien on my house or car? I live in Texas and have paid half of my house and car. My credit score is already very bad. How long will I have the non paid credit cards on my credit report of I stop making payments going forward?

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Bill's Answer
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Updated: Sep 24, 2014

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You have a couple of options other than bankruptcy to resolve your unsecured credit card debts. Credit counseling is the first option. Credit counseling is a third party managed payoff strategy where your interest rates are lowered to the bank's concession rate and thereby your monthly payments decline. Typically, a credit counseling program runs around five years to getting debt free, but each consumer's experience depends on their own creditors and the size of their payments.

The second option is debt settlement. Debt settlement is a program for negotiating and settling consumer debt to a discount to face value. Frequently, resulting in lower payments, lower debts, and a short period to debt freedom while avoiding bankruptcy.

If you are concerned about your home home or auto and whether a creditor can place a lien against your property I advise you take a look at this link which provides the break down of State Consumer Protection Laws and Exemptions. My understanding, you may want to check with an experienced attorney in your state, is that in Texas there is not much a creditor can do. A home and auto in Texas have unlimited exemption.

The good news for your situation is that you live in a state that provides strong consumer protection laws.

In terms of your credit report most items, positive or negative, remain on your credit report for about 7 years.

If you want to resolve the accounts and not have them linger for an indefinite period of time you can contact a debt relief company and consult with them regarding what options you have. I wrote a blog about a company that specializes in helping people in these situations feel free to take a look at Freedom Debt Relief Customer Review.

I hope that the information I have provided helps you Find. Learn. Save.

Best,

Bill

www.bills.com

2 Comments

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  • BA
    Nov, 2009
    Bill
    Please read Advice on Pay Day Loan Collections to learn more about your rights as a consumer.
    0 Votes

  • 35x35
    Nov, 2009
    Lily
    My husband and I got ourselves in to a horrible mess with Payday Loans. We paid them faithfully for about two years. We finally realized that we were just digging ourselves into a deep grave. We closed our checking accounts so that they would not be able to process the checks that we had given them. We signed up with a Consumer Credit Counseling Program run through the local YWCA and have started making payments. The total amount we owe in payday loans is about $8,000. Some of the companies have been calling us and have told us they do not work with consumer credit counseling programs. They did not return the money that they received from us through the program. They have told us it is not enough. We have told them repeatedly that we are responsible for the debt and have every intention to pay them however, we are unable to do it on there terms. Today I got a call from one of the creditors. At first he offered to manipulate the computer system so that I could go in and get another loan so that I could pay off the delinquent loan and just start paying the outrageous interst on a new loan!! I could not believe that he made me such an offer!! I told him that there was no way that I would do that. He then offered me a settlement of $900 on a loan of $1200. He told me it would have to be paid by the end of the month and that I had to call him by tomorrow if I wanted to accept the offer. If I do not call him by tomorrow they would file for a Judgment. I do not own my home or a car, nor do I ever have much money in my account. The only time there is money is when I get paid and the bills haven't cleared! I usually have negative balances and live paycheck to paycheck. If they sue us what would be the possible outcomes considering that we have decent jobs but no assessts? They also called my supervisor today and asked her to have me call them. I called them and asked them not to call my employer and asked they call me and that I would call them as soon as I could. He stated that they nor call my supervisor again to get in touch with me but could continue to call my employer to obtain demographics. When I asked what he meant by that, he stated they could call to ask for verification of my work schedule so that they could serve me? Is this true? Thank you for your help. I love your website!
    0 Votes