Wednesday, August 14, 2013
Todd Ossenfort: Take control of your debt. Learn how to deal with persistent debt collectors and their debt collection activities. Learn how to make the phone stop ringing.
I have a credit card that I have been paying $150 a month for. I have been paying more than the minimum payment. But now, I'm unable to make the minimum payment. The credit card company is unhappy with my lower payment. They call me all the time, day and night. They refused to help me out in any way. They have been very nasty and are telling me to borrow money from my family.
Help!! -- Bill
Todd Ossenfort: Dear Bill
Sadly, since you are able to meet the minimum payment due on your account, your issues are going to go from bad to worse, fast. Each month that you are unable to make the minimum payment, you will be charged a late fee of up to $39 and your account. This increases your balance each month rather than decreasing your balance.
In addition, your creditor will report to the credit bureaus each month that you are late, ultimately, affecting your credit score as well. This will cause your credit score to continulily decline.
You may benifit from talking to certified credit councelor from non-profit credit counseling agency. I recommend you contact a member of the Association of Independent Consumer Credit Counseling Agencies or the National Foundation for Credit Counseling. Your counselor will look at your financial situation and the two of you can determine your best course of action.
You may qualify for repaying your credit card debt through a debt management plan (DMP), you would make an affordable monthly payment to the counseling agency that would in turn pay your creditor(s). The credit counseling agency can often get your creditor to make concessions on removing late payment fees and lowering your interest rate when the creditor would not do so at your request.
If you do not have enough monthly income to qualify for a DMP through a credit counselor, you have a couple of options. You could continue to communicate with your creditor and request a payment that you can afford or you could contact a bankruptcy attorney and determine if filing for bankruptcy is in your best interest. Keep in mind that you do not have to endure nasty comments or harassment from your creditor. Report the creditor to your state's attorney general office if you continue to receive such communication from them.
Take care of your credit!
On paying less than the minimum payment, your what your options are.