The Best Option to Eliminate Credit Card Debt When You Cannot Pay It Is to Defeat Debt Collectors

When people cannot pay their credit card debt they are overwhelmed.  They are susceptible to bad advice from debt service firms and even attorneys.  Most attorneys only know one solution to debt . . . bankruptcy. But, all is not lost, because resistance is NOT futile.  Debt collectors and collection attorneys work on commission and they would rather spend their time with uninformed consumers who submit to their demands.

Of the several choices available, non-payment is THE best choice when you cannot pay credit card debt.  Consider the choices: 

• Non-payment without Resistance
• Many people end of doing this because they feel hopeless, depressed and/or they are in denial.
• They are convinced they are helpless and cannot do anything.
• This group does not respond to debt collection notices or court summonses.
• Consequently, this group of people is the most susceptible to judgments, bank account seizure, and wage garnishments.
• Bankruptcy
• Bankruptcy negatively affects credit reports for 10 years
• .Depending on their income, a consumer could be forced into chapter 13 and a court supervised payment plan for five years.
• Lump sum debt Settlement/Negotiation
• This is actually nonpayment, but those payments are given to a debt settlement firm to accumulate money for a settlement.
• Those firms take at least $1500 for each $10,000 of debt off the top of that fund.
• Credit card accounts charge-off after six months.  Each charge-off will be on a credit report for seven years.
• Will six monthly payments be enough money to settle with?  Debts are frequently sold to junk debt buyers after they charge off.  Then, it is not worth attempting to settle with the credit card company.  Junk debt buyers are best defeated like debt collectors, according to the Credit Card Debt Survival Guide.
• 1099-C tax forms are issued by the credit card bank in the unsettled balance.
• Credit Counseling with Debt Consolidation or Debt Management Negotiated Reduced Payment Plan
• Credit ratings are bruised or worse with this process.
• With reduced monthly payments, balances accrue quicker.
• This only works for people who have enough disposable income to be able to make monthly payments.
• David Jones, the president of Association of Independent Consumer Credit Counseling Agencies said, “The agencies affiliated with the AICCCA used to be able to help 20-25% of the people who came to them to avoid bankruptcy. Now they find they can only help about 7-8%.”
• Non-payment by Resisting Debt Collectors
• The big, obvious benefit is a lot of money is saved.
• According to the Credit Card Debt Survival Guide, you remain in control of your finances after properly educating yourself about the true “collection” aspect of credit card companies, junk debt buyers, collection agencies and collection attorneys.
• Everyone in the know knows that debt collections have no power beyond lies and threats, and many, many sources indicate that a credit card debt lawsuit is unlikely for most people.
• Credit damage is no worse than any other alternative, JDBs can be fairly easily removed from credit reports, and in time credit can be repaired.
• Once a debt is sold to a JDBs, it continues to be resold among JDBs meaning no tax liability for the consumer on the unpaid portion or total.  It is more profitable for them to resell the debt, than to issue paperwork on it and retire it.

Once a consumer comes to understand the true opportunistic nature of debt collectors and collection attorneys, then that non-payment option looks better and better to eliminate credit card debt.

Review our growing list of original articles (21) on credit card debt and collections.

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Educate yourself and become confident with the Credit Card Debt Survival Guide.