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Credit Card Debt Troubles? Know Your Options

Credit Card Debt Troubles? Know Your Options


The biggest mistake you will ever make is to do nothing. You cannot ignore your credit card debt forever. It won’t be long before you will receive a court summons to force you to take responsibility for the debt, regardless whether or not it is yours.

A debtor facing a significant amount of debt need to take immediate action. They can either forget about the debt and do nothing or recognize that they need to settle this lawsuit and take decisive action. Both actions do have their own advantages and disadvantages. Deciding which action to take can be hard but the easiest between the two is to pay what you can afford.

A debtor can find a program and commit to it. If he or she decides to pay the debt, they must apply a strict budget and cover for the smallest debt first and get rid of other debts as they move along. One would find it hard to make ends meet in order to free themselves from debts until the duration of the program ends. This is important to avoid incurring more debts while you go and pay off old ones. The result of your hard work is an end to debt collection harassment and better credit rating.

If you choose to ignore your debt, you could be facing legal consequences. Ignoring your credit card debt is not recommended if you have certain assets like retirement funds, vehicles, or savings account. If you are flat broke, you can ignore your credit card debt. According to the Federal Fair Debt Collection Practices Act, a debtor can give up any collateral tied up with the debt if he or she has no intention of paying the debt and to cease all contact.

During this time, the collection agency is forced to cease all contact but can file a lawsuit against the debtor. However, if you never make any payments, your creditors will lose interest in pursuing your case. At some point, your debt wills no longer be valid based on the Statute of Limitation for open accounts in your state.

Know that the time period for the Statute of Limitation will differ from state to state. If a judgment is taken against you, that judgment is good for a number of years. For example, in the state of Tennessee, a judgment is good for ten years. Note that the judgment can be renewed within the ten year period.

Essentially, you are just relying on the fact that your creditors will lose interest in extracting money from you for a good number of years. The downside is that you will subject yourself to years of credit collection attempts that any assets you possess will be seized to satisfy your credit card debt.

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