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pleiades's avatar

Have you ever just stopped paying your credit cards?

Asked by pleiades (6571points) January 29th, 2014

What did you do? Did you have to deal with collections? How did you get out of it? How does collections garnish wages?

I’m thinking of a strategy to pay off my bills, but without a job it’s a little more troubling. I’m on unemployment insurance and you know how that is, it’s like 2/5 of what was originally being made. I feel I’m at my wits end with all these bills (That I got stuck into because I was putting myself through college and thought I’d be done by now with a decent paying job turns out life had other plans. I accept full responsibility for my mismanagement, what I want to know is does it get better? Have you ever been stuck in debt? What was your game plan?)

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21 Answers

josie's avatar

No. I pay them off at the end of the billing period. It is a good deal that it is free money for a month. It is bad news if you pay the ridiculous interest.

WestRiverrat's avatar

Yes, I paid them off, cut them up and returned them to their respective companies. Have not paid a credit card bill since.

To garnish your wages they will have to take you to court and win, unless you voluntarily allow them to garnish your wages. Your best bet is to work with the credit card companies, it will be better on you Fico score and won’t get you into trouble with the law for just not paying.

DWW25921's avatar

You have to have a plan. Most companies will work with you. I even told 1 company that I would guarantee they would get paid if they would stop interest from adding up and I sent them $10 a month! That took years and that’s ok. The point is I was on it, each and every one until they all vanished.

livelaughlove21's avatar

No. That would make me so nervous. I’ve never even been late on a payment before.

My original intention was to put small items on my credit card and pay it off monthly, and that’s how it went for awhile, but we’ve managed to build up about $4000 in credit card debt in recent months thanks to having to depend on one income while I was in school, emergency vet bills, and other unexpected expenses. Luckily, those cards don’t start building interest until next month, when we plan to pay most or all of it off with our tax refund. And a few months short of my first student loan payment.

Cruiser's avatar

Contact your creditors in writing and explain your situation and make it clear you have every intention of paying off your debts. This will help you in the future to have proof you are not a total dead beat when these late payments come to haunt you when you need to get a loan or mortgage.

Secondly…go get a job, make it 2 jobs to start paying off your debt. Living on unemployment insurance is not much help to your predicament.

hearkat's avatar

Only under the advice of my bankruptcy lawyer. There are credit counseling services that can help you negotiate better terms or some people manage to do the negotiating on their own; but one shouldn’t just stop making payments.

Judi's avatar

Go to consumer credit counselors. They are the one that’s been around for probably 50 years. They will negotiate with your creditors, sometimes getting interest stopped and balances lowered. You have to stick to a budget and give them your money and they pay the bills but you will get the bills paid off sooner this way.

flip86's avatar

Yes. It was sent to collections. I’ve also not paid phone bills and electric bills because of money problems. My credit is terrible. I’ve never faced legal problems. Just get a collection notice every few months or so. Most of the bad debt has fallen off my credit report because it was more than 7 years ago.

About getting a job, just apply everywhere. Do it for an entire month. Make a goal of applying to 5 or 6 places a week. It gets incredibly tedious but it worked for me. I lost my job in July and was back to work in less than 2 months.

Smitha's avatar

No, I would not like to ruin my credit reports. Till now everything is up to date.
Since you are unemployed, like what others have mentioned above I think you need to visit credit counseling places like Lutheran Social Service .They might be able to help you with a bankruptcy filing or help consolidate your debt.

JLeslie's avatar

No. Generally, I don’t buy something unless I have the money to pay for it. I charge everything, but I already have the money in the bank, and I pay my credit cards off in full at each billing cycle. I use my credit cards to make money on not having to pay for an item until the bill comes a few weeks later, and by choosing a card that gives my sky miles or hotel stays.

Once in my life I was beginning to get over my head. I was in my early 20’s, just starting iut, and my dad floated me some money, $1,000, so I never got behind on bills. I’m really glad he offered.

Worrying about paying bills is the worst feeling, I really empathasize. Money stress is very high stress.

The way to get out of it is to tighten your belt as much as possible. Cut back on everything you can. Maybe you already are, I am not assuming you aren’t. Stop drinking alcohol, stop getting Starbucks, don’t buy one stitch of clothing. Also, really keep track of what you spend your money on and show the list to a trusted friend or jelly to scrutinize where you can save. I have no idea if you drink or get starbucks or any of those things, they are just examples of high cost items that are completey unnecessary and many people do without.

If you are living on unemployment and not seriously looking for a job, you need to get serious. Most people like the ride of unemployment, one of the few times in life we get it, we figure ride it out. Or, most people do. But, if you can’t afford your life you have to go work. Again, I am not assuming you are doing this.

I agree with @Cruiser to write your creditors if you have no other recourse, but to try to have them agree to adjust your payment schedule.

You can look for lower interest credit cards and move your balance from one card to another.
Some cards are no interest for several months, but a lot of the time the fine print says if you don’t pay in full before that date they charge a high interest and all the back interest. So, you have to be careful when transferring credit card balances. You have to read the fine print.

If it isn’t a lot of money can you ask your parents or a close relative? I don’t know how old you are that you might feel comfortable doung that, but getting rid of the debt is so much cheaper in the long run. Every month you pay interest it is like throwing money on the street. I assume you have not been paying your credit cards in full even when you had a job from what you wrote; I might be wrong. If I am right that means you were not living on your salary, let alone living on unemployment. I could easily be incorrect though. Maybe your debt only started when you lost your job.

CWOTUS's avatar

No. But ask me about taxes…

jaytkay's avatar

They can garnish your wages after they sue you and win a judgment in court.

Before that happens…

One option – Ask for time, ask for them to stop charging interest and late charges. Ask them to remove past late charges.

Another option – Ask for a lower payoff. They might be willing to take a small amount and call it a day.

Worst option – get sued for the full amount, they will win, they can garnish your wages. No mercy, no discount.

stanleybmanly's avatar

the one thing you must not do is ignore the problem and simply not pay. It’s equivalent to ignoring an abnormal growth on your body. Believe me, the financial sector will MAKE YOU PAY, and not just in money. Our system is rigged such that it is next to impossible to exist with the mark of deadbeat on your record You are putting your opportunities for future employment at jeopardy and marking yourself as “undesirable” in society. Nothing short of a criminal record could be more detrimental to your future and unless you can devise a way to live completely off the grid, you should get cracking with letters explaining your situation to each of your creditors assuring them of your fervent desire to make good on your debts. Retain copies of the letters, and if possible send each of them a few bucks as a demonstration of sincerity. There’s good advice above. But get cracking. Your future’s at stake.

Pachy's avatar

Yes, in the ‘90s, when I was having severe financial problems. But I did it only because that’s what a debt management company told me to do while they were negotiating with my creditors to cut my interest rates, waive late fees and put me on repayment schedules. It took me more three years, but I paid off all my debts and have stayed debt-free ever since.

KNOWITALL's avatar

Yes, when I was young and didn’t know any better.

If you make the minimum payment, you won’t get in trouble. You can also call them and see if they offer any plans for people who are not employed and they may defer it or help you in some way.

pleiades's avatar

@stanleybmanly Send them a few bucks with my letter asking for some sort of deferment… hm….....

deni's avatar

My roommate stopped paying hers a year ago. Just the other night she got SERVED papers at our house. That was a first. Never saw someone get served before. She now owes them 3000 dollars pretty soon.

stanleybmanly's avatar

@pleiades The mere appearance of attempting to “do right” by your creditors will serve your interests, since banks are critically sensitive to their image problem. On the other hand, if you allow the perception of you to shift to that of a profligate deadbeat, the image problem becomes YOURS and your creditors will eagerly crush you like a bug.

trailsillustrated's avatar

Yes I just walked away. I went off the grid and they all went uncollected and the statute of limitations took over. But then I went back on the grid, and I got collection letters, and a notice from some fly by night had bought the old debt, got it ‘forgiven’, and I now owed the IRS $1500.00, I have what’s called a ‘blank’ or ‘white’ credit rating, which means you have no credit at all. Which I don’t care about because I left the us and am never going to live there again, so they can whistle for their $1500.00. I paid all my professional school fees in cash, I never had student loans thank god. I now live a very simple life and pay everything in cash and just buy food, rent and utilities. If I need clothes I go to the op shop. I take a sandwich to work every day.

College_girl's avatar

I don’t actually have a credit card yet because I’m afraid to get one since i’m only 21. My best idea would be to try hard to stop using your credit card and switch to a debit card as your main payment method. That way you can see how much you have left in your account without having to pay it off. Only make small purchases on your credit card

pleiades's avatar

Just an update with my highest credit card which was with Best Buy totaling 4800$. I didn’t know it, but I’ve been paying coverage for debt protection this whole time and since I lost my job I was told to call the “debt protection center” third part to Best Buy. I applied for it since I lost my job and everything was paid off. (Of course I was paying into it so there is that catch.) But I did what everyone said to do and try to talk to them (Best Buy) to get a pro rate or something with monthly payments. Guys I would’ve never used my insurance benefits had I not posted this question on Fluther. Thanks for pushing me forward and getting the courage to talk to them. I am extremely appreciative.

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