Question: I lost my job last July and tried to continue my payments which I was able to do until September. When I realized I was unable to make any more payments I wrote letters to my creditors and told them the situation and that I would resume payments as soon as I could. I have been unable to live up to my obligations. What is the next step? I tried making a small payment of $150 each to MBNA AMEX HBC and SEARS but that has been all that I could do. I believe they have all gone to collection now. What next?
Answer: If your debts have gone to a collection agency, their next step will be to attempt to collect from you, by making phone calls and sending you letters. If they are unable to collect, they may then decide to take you to court and sue you; their goal is to obtain a garnishment order so that they can garnishee your wages.
If you are not working, you do not need to worry about your wages being garnisheed. However, once you return to work, and the creditors find out where you are working, you will need to take action. At that point a bankruptcy may be necessary.
If you are back to work, or expect to be back to work soon, we suggest you contact a trustee to review your options in more detail.
