"Over the past decade, U.S. households have been loading up on debt, with credit-card balances rising 75% since 1999. Yet families' real wages have increased only slightly â by just 4% during that same time period, according to Innovest."
what can someone do without the money to pay back the debt without resorting to bankruptcy? if its in the hands of collections agency,can you still call the origianl card company and negotiate small monthly payments? what else can be done?
No, you can not go back to the original creditor, they no longer have the account. The sold it to the collections agency. If you want to negotiate, you have to negotiate with the collections agency that owns the account. They will negotiate with you to make small monthly payments, but they will charge the same usurious interest that the credit card companies do that make it impossible to pay off the debt. Sit down with pen and paper and figure it out. If you only owe $5K - $8K, it may in fact be in your best interest to negotiate with the collections agency and work out what you can afford monthly and how many payments will be needed to pay it off. Make sure you can afford the payments and that you will make them every month on time. If you are late even once, it starts all over again. And with collections agencies they will make you are late once in a while by filing your payments late if you are paying by check through snail mail. Even if you work out a deal to have you bank account debited electronically every month, they will continue debiting it after the debt has been paid, and they will give you an, "oops sorry", and keep doing it anyway. You will end up having to close out you bank account because your bank may not help you stop them from debiting your account. If you owe more that about $15K, or maybe even only $10K, and your income is below the median, (about $40K), just save up for a BK lawyer and get it discharged. You'll never get out from under that with a collections agency.
can a collection agency force someone to sell their home in order to pay? is it easy to get a wage garnishment?
A collection agency can not force you to sell your home, but they could ask a judge to force you to sell your home. It's unlikely that a judge would order you to sell your home, but it is possible because it's legal. Wage garnishments are difficult to get. It varies by state, but the collector has to file documents first with a government regulatory agency who then approves the garnishment after a certain amount of time passes. It could take up to three months before they get the approval. Collection agencies don't like to do it because the debtor may have changed jobs by the time they get the approval for the garnishment and then they have to do it all over again.
what if you are self employed? how long can this go on if you just continue to ignore the debt collectors phone calls? do they call you for twenty years? is there a start and cut off from where it stops showing up on a credit report?
stock_trad3r that just causes a deeper hole. its all too common and thats what causes consumers to have never ending credit card payments.