I owe about $1600 dollars on a credit card, that I opened when I was 18. I paid half my tuition on it, and I could not make the payments. That was 3 years ago (I am 21 now). I have received numerous letters from the credit card company, and then from creditors, and last week I received one that scared me from a group of lawyers, that live in my city.
I have heard that if you make no communication with the creditors, because you can not pay (which is my case... I barely pay my car everymonth, and I go to college full-time), they can't do anything passed sending you letters. BUT now I don't know what to do with the letter from the lawyers? I can't pay it off, most of it is interest, and I'm broke, my family is broke, and I barely make it each month on the $$$ I have.
What should I do with the letter? Will they take me to court? I have no assests, except for my car, but I know they can't take that away. What should I do?? And MOST important what can THEY do to me??

The best thing for you to do is call them!! By avoiding them you look like your avoiding the debt. We know that your not, you just don't have the money. If you call them and be completely open and honest about how much money you make, what you pay in bills etc they most likely will work out a minimum payment that you could afford. If you ignore it they may seek a judgement against you.

First of course since lawyers have it, they most likely are planning law suit to get a judgement, that way they can garnish your wages or attach your bank accounts. You would be surprised how many students come here talking about having their money for college in the bank and it being attached and gone.

They will want to get a judgement and that way even after college they can get your money when you do get a job.

Hello Magen:

First off, don't be scared. It's only about money and people and the agreements they make. It's an adult activity. It's something you're going to have to learn to do without being scared. Believe me, you WILL live through this experience.

The good news is, that you can LEARN a great deal about how things work, and the lesson isn't going to be especially costly - but, it ain't free.

I agree with the advice you received from kanicky with some modifications. Before that, let me spell out what you're facing. If you do nothing, they'll sue you and get a judgment against you.

That may not be all that bad given your present situation. We call that being “judgment proof”. You're right. You ain't got squat, so they can't get squat. In that case, a judgment is just a piece of paper with some stuff written on it, that doesn't mean anything in the real world, and who cares if they get one of those anyway? I know a guy with 15 of 'em. He works for cash.

The downside of being judgment proof, is that you have to stay that way for the life of the judgment. Some of them last 5, even 10 years, and they can be renewed. Being a young person in college, I wouldn't think you'd want to stay broke for 10 or 15 years just to avoid paying a debt. So, crying that you're judgment proof ain't going to cut it, because you're not.

Ok, if you're not going to take the judgment proof route, then you're going to have to pay something. The question now becomes, how much.

IF you let them get a judgment, it'll be for the entire amount, plus interest, plus late fees, plus attorney's fees, plus court costs, plus the kitchen sink... You CAN'T let them get one of those.

So, how are you going to stop them? Here's where my advice diverges from kanicky. This situation didn't just crop up. Before you heard from the attorney, there were letters, and phone calls, and more letters. You ignored them all. THAT would have been the time to try to set up a nice payment plan. That time has passed. NOW they've hired a lawyer. NOW they're not interested in a payment plan. Why would they be? They know they can get a judgment. Why should they take the chance that you're going to make your payments THIS time? Well, Magen, they're not going to.

So, if they're not going to set up a payment plan, why should you call them? You should call them to offer CASH to settle the claim. Now Youngster, if you can't get CASH, then just wait for the judgment. However, if you get some CASH, call 'em up and NEGOTIATE. Start low, and settle for what you can. But, if you just call to tell them what a nice person you are, they'll laugh, and they'll nail you to the wall.

Welcome to the adult world.

excon