?Ways to Avoid Being Sued Because of Credit Card Debt
By missing a payment or being late to pay once or twice, credit card debt can suddenly pile up dramatically. This can lead to minimum monthly payments in the hundreds of dollars. When you can’t pay, the creditors that you owe may begin to threaten you, claiming that they will sue you for the money you owe.
There are a minimum of three possible actions that an individual can take in order to prevent being sued by a credit card company. They can file for bankruptcy, take advantage of the help offered by a credit counseling service, or limit the amount of money they spend each month to produce extra money that can be used to pay off their debts.
Bankruptcy: The Right Choice for You?
If your credit card debt is overwhelming and your circumstances make it virtually impossible for you to repay the debt, bankruptcy may be an option for you. Consult with an attorney specializing in bankruptcy to find out if filing bankruptcy would reduce or eliminate you credit card debt. At a minimum, filing for bankruptcy may fend off a creditor who is threatening to sue you over credit card debt. Filing for bankruptcy may also buy you some additional time to pay off your credit card debt by allowing you to restructure all your debts and reestablishing the minimum amount you pay to each creditor.
Bankruptcy is a drastic step that can have a negative impact on your credit rating for many years to come. You should not consider declaring bankruptcy until you have consulted a bankruptcy attorney and carefully weighed all your other options.
Credit Counseling: The Best Choice?
If you are concerned that you may be sued over credit card debt, one alternative to bankruptcy is to consult a non-profit credit counseling service. A credit counseling service will assess your income and your debts and approach your creditors on your behalf to make alternative payment arrangements. You make one monthly payment to the credit counselor, and the credit counseling service pays your creditors for you, per the agreement they made for you.
Making payments through a credit counseling agency may mean that your credit report reflects late or delinquent payments; however, these ratings are not as detrimental to your credit and do not last as long as filing for bankruptcy.
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