I have three reading assignments for you. But first, allow me to define two terms. Unsecured debt is debt where the creditor has no claim to an asset. A credit card is an example of unsecured debt. A secured debt is tied to an asset, and can include a mortgage loan, or vehicle loan. See the Bills.com article Types of Debt to learn more.
- Read the Bills.com resource If I Pay a Small Amount on My Debt, Can I Be Sued? that addresses your question about paying the original creditor or collection agent $150 per month.
You cannot set your own payment amount without negotiating an agreement with the creditor on the amount of the monthly payment.
- Read Collections Advice to get a general idea about the debt collections process.
In general, if you become delinquent on a debt, the creditor can sue you for breach of contract. If you are sued and do not defend yourself or otherwise lose the trial, the court will almost certainly give the creditor a judgment, which the creditor can use to garnish your wages, seize the contents of your bank account, or get a levy on your real property, among other remedies available in some states.
- Read the Bills.com white paper on debt solutions, to help you decide your best course of action to resolve the debt.
In brief, your options are to negotiate a settlement with the creditor, enter a debt management plan, get a cash-out refinance, or file for bankruptcy.
Please ask any follow-up questions you have on the appropriate page.
If you own a home with more than 20% of the value in equity, you should refinance your mortgage and consolidate debts with a new mortgage. If you can't refinance, but can afford to pay more than 4% a month in monthly payments, then explore rolling up your debts by paying as much as possible to the account with the highest interest rate first and then snowball up your debts until they're paid off.
If you can't afford your monthly payments, then explore debt settlement (where you resolve your debts for less than you owe and get debt free in a short amount of time, but sacrifice your credit rating) or credit counseling (where you pay slightly lower interest rates and lower your monthly payments). Lastly, if you cannot afford to pay even 1.5% of your outstanding balance each month, then seek counsel from a bankruptcy attorney.
I hope this information helps you Find. Learn & Save.