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too much debt

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What is the name of your state? GEORGIA

I am currently a full time student and working as a waitress. Up until about 2 years ago, my credit was excellent (no past due, rated in the top 10%). Over 2 years, I had some problems with my financial situation that I ended up with about $40,000 credit card debt and car loan. I don't have any families I can turn to, and only making about $600 from the restaurant. Creditors already start calling me, and some of them have turned my files to the attorney. They told me they're going to take 'legal action'. What does that mean? Can they take me to jail? I want to work with them but the amount they require from me usually is way too high, and I have to tell them I can't do it. Should I file bankruptcy? What's the worse can happen? Please give me some advice (other than pay my debt). I can't ask anyone else for a loan. I have noone to turn to.


Senior Member
Given the facts as you've presented them, I would suggest you schedule an appointment with a bk attorney. Most will give free initial consultations.


Senior Member
First, there is no debtors prison in the United States, it was abolished a couple hunderd years ago !! They cannot take you to jail for any of this.

The 'legal action' they threaten is basically a lawsuit, they can get a judgment against you and garnish your wages, sieze assets (or try to), etc., that's ALL it means.

If you have no assets that they can take, then there isn't a whole lot the can do to you except harrass you and possilby garnish your wages, IF they sue. If they do, then you will know, you would be served papers.

What you need to do first is read the Fair Debt Collections Practices Act (FDCPA) and learn what your rights are when dealing with collection agencies. The biggest thing you MUST know is that collection agencies (they say they're lawers, but they are CA's) use scare tactics to try to make you pay them. Most of their threats are even illegal under the FDCPA and so is verbal abuse. So, DON"T let them bully you. Read the Act, and if if they get nasty, start quoting the FDCPA to them, most of them will shut up or ammend their behavior.. they count on people being ignorant of the law and their rights !! You can find the FDCPA here: http://www.ftc.gov/os/statutes/fdcpa/fdcpact.htm#806
The section this link goes to refers to the section on harrassment and abuse, but make sure you read the rest of it too.

Next, stop them from calling you. Send them a cease and desist letter, certified return receipt requested and in the letter you tell them never to contact you by phone again ONLY by mail, by law they MUST comply. If they don't they are violating the law. Another thing to understand, NEVER deal with these scumbags over the phone, do everything in writing only and make sure you keep copies and document everything. These collectors will lie thru their teeth, its useless to talk to them over the phone.

You can find sample C&D letters at www.creditnet.com, under the discussions area. You have to register to get them, but its free.

If the original creditors are calling you and not collection agencies, there is little you can do to make them stop calling. Unfortunately, there is no FDCPA controlling their abhorrent behaviour and language... and I've run into some doozies working for OC's.

You can also send a letter offering a payment plan that YOU can afford. They'll refuse, of course..at first anyway. But they only want money, so if you stick to your guns in offering to pay something, then you can probably get somewhere.

Bankruptcy for that kind of debt, at your income level, is certainly an option, and would get you free faster. However, keep in mind that it will be on your credit report for the next 10 years, and it will be difficult to get any kind of credit for several years after the discharge.


thank your for the fast responds guys! I planned on at least getting the NOLO guide to filing chapter 7 book. I can't afford a BK attorney. One more question: If bk will stay in my credit report for 10 years, then what other option do I have if I'm graduating in a year and will probably need to get business loan at that time? Should I send letters to all my creditors offering min payment plans that I can afford? Does that mean my credit will not be ruined as bas as if I file for a brankruptcy? Thank you again for repplying.:(


Senior Member
Well, you can TRY to negotiate a payment plan with the original creditors, but they aren't very co-operative unless the account is close to charge-off, then they may make some concessions and settlements. Sad as it is, original creditors refuse to work with you much until your account is really delinquent, and at that point your credit's already a mess.

You may have better luck negotiating payment plans and/or settlements with the collection agencies.

If your accounts go seriously delinquent, your credit is going to be trashed anyway. You might get the original creditors to re-age your account, bringing it 'current', but if you don't pay them on their terms under those circumstances, you end up just as bad off or worse than before. Its sad.. but its true.

With your income, as low as it is, you're going to have a very tough time digging out of a 40K hole of credit card debt. It can take 32 YEARS to pay off one 5000 balance making minimum payments.

Bankruptcy is not easy, but the NOLO press book is VERY good, I have a copy. If you haven't much in assets, filing pro se might be ok for you, just be aware that the legal paperwork can be daunting. Getting a business loan after you graduate with a BK on your credit would probably be tough unless you have co-signers, and/or significant cash up front.

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