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Email: Resolving a Debt in Collections

I recently received another email related to debt that I’m wholly unqualified to answer so I’m posing this up to everyone who reads in hopes that you will be able to help this person out. The last time I did this there was a lot of supportive comments and I hope this time maybe you could give more suggestions if there are any out there. Without any experience with massive credit card debt myself, I just didn’t feel qualified to speak on the subject and dispense any sort of advice.

Hi Jim,

I came across a link to your site on bloggingawaydebt.com [3] several days ago. I read and appreciated the referenced article. I knew I had some debt to deal with but since reading your article, things have become more urgent. Of course now I can’t find the link to the article on your site I read originally, but I’m reading plenty of your articles and decided to contact you. Below is my story. I would really appreciate any information you can pass to me.

My situation is a little unusual as it’s not new debt or current debt. I have no credit cards and haven’t for quite some time. I had a company that failed and suddenly found myself without income and unable to make credit card payments. I kept looking for work, but only found temp or very part-time work with not enough to support myself on, living with relatives, etc. My creditors finally gave up on me, particularly when I commented they were eventually going to cause me to have to file bankruptcy (NO, I don’t want to do that!).

Fast forward several years. I began working one almost full-time job, retail, almost two years ago. I was working two part-time jobs beginning a year ago and finally moved out on my own March 2006. In October 2006 one of the part-time jobs became full-time and I’m still working one additional day at the original retail job. I’m living in a rented home I pay only $550/month, but I still have utilities and other living expenses, repaying a personal loan from a friend for a car, car insurance, etc., so I can get to work. I’m also paying off a student loan and paying $25/month to the IRS for 2005 taxes I couldn’t afford to pay at filing time, because some of my 2005 income I was 1099ed.

Still with me? A couple days ago I got a letter from my largest creditor. I haven’t responded yet. I’m looking at what I’m making (netting approximately $1330/month) and what I owe them $13,000+ and I don’t see any way I can offer them a large enough monthly payment to make them want to settle with me. BUT, I owe a total of almost $40,000 (yes, I had excellent credit at one time) and I know it’s only a matter of time before those other creditors come knocking on my door. I don’t know what to do. I’m so overwhelmed and stressed over this. I thought maybe I could find a free debt counseling service somewhere, perhaps a senior service as I’m 58, but I don’t know where to look, and really, what can they advise me? I’m so afraid I’m going to have my wages garnished and lose my job and then where will I be? I won’t even be able to support myself. I’m trying so hard not to become a burden on society, but I’m just at the end of my rope. Do you have any suggestions or resources for me?

ps: On reading the comments to article Paying Off A Debt in Collections [4], I noticed the last comment by Ralph (comment 17) mentioned a judgment and then a collections company Asset Acceptance. This is the same company that is contacting me. So, it’s a collection on a judgment? I suppose that changes things. *sigh*

One very good trend I’m noticing is that most of the people who do email me have turned things around and are just looking to make things right, which is great. Again, if you have any tips, please do share… collection agencies are horrible horrible creatures (there’s got to be a better way to make a living than by harassing other people).