Should I call my creditors or collection agency?

A reader writes:

"I am writing to get any help from you. I am in, what I feel, is serious credit card debt. I wouldn't worry too much except that I have been receiving the typical harassing calls from a debt collector and also, as of this morning(10-23-04) I was told that, if I would not call by 1pm, they would be "making a decision" without me being involved!

I am very scared and for the reason I am not employed, but will be as of Monday, but won't be seeing any money for at least 3 weeks from then, I don't know what to do!! I haven't had even ten dollars to spare to send to these people and because I've been so scared to talk to them(after one call I did take from the main credit card company)and knowing they will not accept my REAL true reasons for not paying, I just have avoided their harassing calls. What can i do?? Should I call the debt collector today?"

That's a pretty scary situation, so your first step is to take a deep breath and know that you'll get out of this okay. Better?

Good.

Now, if you can show some proof that you're now employed (an offer letter, a copy of an insurance card, an employee id, whatever) then I would indeed suggest that you call the credit collection agencies and talk with someone about your situation. Tell them that you just got a job - and you can send them proof of employment - and that once you begin to get paychecks you'd like to work with them to come up with settlement terms that will let you pay down your debt.

They should be amenable to that, since, after all, their goal is to realize some payment for a fraction of the debt. Ideally a large fraction, but even $0.20 on the dollar is sure better than them wasting their time and you declaring bankruptcy.

Also, do pop over and read our article on Fair and Legal Debt Collection so you know what a collection agency can and can't do legally.

Good luck!