What You Need To Know Before You Pay That Credit Card Debt

February 17th, 2010 by Reed Allmand

Many debtors who have fallen at least six months behind on their credit card accounts are receiving payment demands from debt collectors.  These calls and letters can be unsettling and scary.  But it is important that debtors understand that debt collectors are infamous for using unethical and even illegal means to get you to pay your debt.  Before you rush off to pay that credit card debt because of the demand of a debt collector, there are a few things you need to know:

1. Can you afford to pay? Most debtors know that they cannot afford to pay astronomical credit card debt AND keep their house out of foreclosure and pay other more important bills.  But unfortunately, many debtors succumb to the high pressure tactics of debt collectors and part with money that could have been put to better use.  Yes, it is best that we pay all of our bills; but sometimes this just isn’t possible.  Job losses, medical crises and other emergencies may keep us from paying.  Remember, if you cannot afford to pay your debts, bankruptcy can be used to discharge them, especially unsecured debts such as credit cards.
2. Is the debt really yours to pay?  This may surprise you; but credit card companies often make mistakes when calculating what you owe.  Debtors have a right to dispute the amount due claimed by credit card companies. If you suspect that a credit card debt is inaccurate, ask for proof and do it in writing.
3. Does the debt collector really have the authority to collect on behalf of the credit card company? There are many scams out there that prey on unsuspecting debtors. These scams involve “companies” who falsely claim to be collecting a debt on behalf of your credit card issuer. If you suspect that a debt collector does not have the authority to collect on your credit card debt, ask the debt collector to provide written proof that they have the right to collect on the debt.