No money to pay collectors

What do you do if you don’t have enough money each month to pay collection agencies? After taking a 20% pay cut, I’m budgeting as much as possible just to meet monthly expenses such as rent, car payment, day care, groceries, utilities, etc. Most months we squeek by, but the credit card payments went by the wayside, and are now in collection. I did talk to one of those companies that offers help with paying debts before letting things slide, but after going through my budget, they simply suggested bankruptcy, which I don’t want to do.

Do I just let the agencies call for now, until I’m in a better position to make payments? I can see that a year from now, I’ll be able to start making some type of repayment plan. In the meantime, do I just let it go? I’m not sure how to handle this. Thanks.

Take care of your necessities first. Let the collectors go hang. What I did for a little while was send them a copy of my budget – and a check for $1 or $5. That way they know you are still trying. It doesn’t really make a dent in the debt, but gives you some leverage to work with them later.

I would like to add that not only focus on building a budget that pays your monthly necessities to live but put away as much as you can in cash(not in a bank account that can be seized should you end up defaulting). Think on the scale of at bare minimum 1 months worth of living expenses in cash at the ready so if you are(not saying you will be)faced with having wages garnished or your bank account seized you can keep the roof over your head until you figure out something else. My own situation more recently I had to let a credit card debt go and it was charged off.

Now the sleazy debt collectors have discovered it and I’ve managed to keep them at bay with the debt validation issue among other things and I’ve consulted with a couple of attorney’s thinking I may have to file BK again myself even tho the one I have on record is slated to fall off of my credit report in a few months. I dont want my spouse’s wages garnished and its a possibility in the long run but unlikely as the debt is not that large. It has opened my eyes tho to the fact that I need to take care of me, and my spouse and I need to have a better plan since this is looming over our heads. We’ve decided to sink all of our extra cash into building a cash reserve that will at least pay our bills/one month’s living expenses first.

Once that is accomplished and its almost there, we might try for another. We’ve also opened up two additional bank accounts- in spouse’s name since spouse does’nt currently have any credit problems such as this. They are small but we are adding to them. I am planning on opening another account at a different bank in my own name before Sept.’s end. They are offering a 100.00 incentive to boot! I’m tired of being a victim of the credit industry in this country. Someone here wrote in asking what they are missing.. they are’nt missing anything.

If you try to remain in good standing and want to do the right thing it seems to fall on deaf ears. No one cares. They can write off the debt you are slaving away to repay in a blink of an eye. Dont kill yourself over it or sacrifice your quality of life and time with your kids. Its not worth it. Its debt. Even BK can only stay on your record for 10 years. Eventually it all will disappear. Eventually you can start over from a clean slate. Really. I’ve been there and I’m back there but not on the scale I was. Just do the best you can but things in this economy right now are so uncertain I would seriously urge everyone to have some kind of cash reserve that is available to them at a moment’s notice. I dont care if you have to start with 10 or 20 bucks. Thats what I did. I now have a nearly a months worth of expenses sitting here in cash just in case.

Another thing I’m doing is paying things like my phone and utilities in advance as far as I can. Every little bit helps. If spouse’s wages were to be suddenly garnished.. my lights,heat, phone and internet will stay on. I guess what I’m trying to say is think about what means the most to you and if you woke up tommorrow to find your bank account seized or your wages garnished what would you like to have already taken care of so you wont do without? Use that as a starting point and start building to take care of that so if you are faced with the worst then there is only so much they can take from you. I fyou pay your rent in advance and your utilities or you are not behind in your mortgage and have enough in cash to cover it one or two months- your better off and wont be caught with your pants down. Try to think of the worst case scenario and what you need to do to combat it.

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