The answer is simply YES, but if the payment problem is a result of a financial emergency, loss of income or medical problem it is very likely a credit lender will work with you to help you through the crisis. Some companies, however, are interested only in collecting the payments due.
Calling You Repeatedly
The first tactic used is to call you repeatedly and mail one late notice after another. The phone calls can be disruptive with several automated calls each day. The barrage of calls and demands for payment are designed to make you send money.
You may receive calls at work and relatives may be called about your debt. There are laws limiting the hours during which collection calls can be made but nothing to keep a company from calling you repeatedly day after day.
You cannot claim harassment if a lender is only asking for payment that is past due. It is at this point in the process where the consumer may be able to work out a better payment plan.
The account may be nearing the date for “charge off” where it will be listed as a bad debt and collection efforts by the lender will cease. Now is the time to negotiate.
Lump Sum Partial Payment
A credit card lender may be willing to accept a lump sum partial payment as payment in full just to close out this account. The lender may be willing to accept lower payments or combine a new payment plan with a reduction of the debt itself.
If your lender is willing to enter into a settlement offer, this may be the best option you have. It will not save your credit file from showing bad credit information about late payments but by paying off the debt you can avoid further collection activities or a court ordered settlement.
Credit lenders will often offer a settlement option to delinquent account holders. This may be an offer to pay 60-80% of the total debt in exchange for the account being labeled as paid in full.
If you have the ability to make a lump sum payment you can negotiate for a better settlement offer.
Its not unusual for a credit card company to accept a one time payment of 20-40% of the outstanding amount due on a credit card account to settle the debt. The account will be closed, of course, but the payment settlement will be reported to credit agencies.
A settlement for less than the full amount owed on your debt is still a black mark in your credit file but may be easier to overcome in the future than an account listed simply as a bad debt that was written off by the lender.
If you fail to arrive at a settlement or are unable to make any payment on the account that would satisfy the lender, the account will eventually be closed as uncollectible. This is known as a write-off and is the worst thing that can happen to your credit card account.
Can I Be Sued if I Have Already Payed My Debt To The Lender?
You might think you are now safe as the debt has been wiped clean, but the debt is not gone. Now you are probably asking yourself another question: “How can I be sued if I have already made a deal with the credit company”? I mean, aren’t they satisfied now when they got their money?
Well, the real truth is that the lender has given up his attempts to make you pay the amount due but he will now send that bad account to a collection agency. The agency earns money only if they can make you pay and that’s why they will most likely sue you.
These suits often result in a judgment levied against you and a ruling ordering you to make payment. The payment may be by check or in the form of a garnishment of your wages. The court may order a lien placed against your property until the debt is eliminated in full.
