Dear Your Business Credit,
I have a business charge card that I have used for both business and personal use. I owned an LLC, which has recently stopped making money. I tried to negotiate with the credit card company to allow me to pay a certain amount, which was half of what they were willing to negotiate. I spoke with three different supervisors that told me that they can't change the amount the computer said is the minimum I can pay. They told me paying a partial payment will not help.
After a couple of months of not paying because I could not afford to, I got a call from a representative from the credit card company, and I told him I could only pay $100 per month. We agreed that is what I would pay and I said if I can pay more I will pay more. He said that the account would remain in the closed state until I can pay the minimum amount to bring it current. I said okay.
I was able to pay another $100 before the month was over, and two days later I get a threatening phone call from a collection agency stating that my account will be escalated to litigation and I will be sued if I can't either pay the full amount in excess of $25,000 or a $2,000 payment each month.
What are my options? The company is closed now and I am unemployed. My husband is the only one that is employed. Can they come after him and his wages? What can I do? I want to pay the debt that I owe, but I can't afford to do this at this time. -- Jon
Dear Jon,
Ugh! Your situation seems very frustrating. It sounds like your phone call was with a low-level employee of the credit card company who did not follow up on your deal to pay $100 a month. That's why it's always important to get these agreements in writing.
Now that you know the credit card company does not want to cooperate, it's important to get clear on what matters most to you. Is it more important to protect your credit score -- or do you want to unburden yourself of this debt?
If you want to protect your credit score, then there's no shortcut. You need to come up with the money quickly. One way you could do this is by looking for a high-paying temporary job as you continue searching for a permanent one. Depending on what type of work you do and your cost of living, you may be able to come up with the $2,000 a month this way, but it would cut into any unemployment benefits you are receiving in the short term. You might also look at selling something valuable, such as a car, that would enable you to make a big dent in your debt.
Another option worth considering is to borrow the money from someone else to repay the credit card company now, and then work out a payment plan. For instance, perhaps your spouse would lend you the money. Reading between the lines, it sounds like you have decided to maintain your finances separately, so I'm going to assume you ruled out this option, but perhaps there is someone else in your life who will make a loan to you.