This is not the best situation….Once you approach the 180 day past due mark, your credit card companies are required by law to “charge off” the accounts as bad debt. A charge off really damages your credit rating, and when it happens, the damage is done and there’s no undoing it…The charge off notation will stay on your credit report for 7 years.
- Do you best to prevent a charge-off if this has not already happened for the sake of your credit rating
- Ask your creditors about any hardship programs that they might have…they usually do when accounts get this far behind
- There is non profit credit counseling available. They can negotiate reduced interest and payments. Use this site for a referral:
- Ideally, the best way to pay off credit card debt that has gone this far past due is to offer to settle for less…in the 25 – 50% range. They will only do this if you can pay settlements up front….they won’t settle for less if you can only pay in small amounts over several years.
- If you can’t afford to settle, then the credit counseling may be your best bet. You need to understand that by going this far past due that you’ll have bad credit for 2 years and there is no way around this. Again, try to avoid the cards being charged off.
- STAY AWAY from the firms that you hear about on TV that will cut your debt in half…They trash your credit to settle for less…which makes no difference in your case as you’ve already neared the point of default on your cards. You can settle for less by yourself as stated above.

Contact the credit card companies and ask them to adjust your rate lower. It is in their best interest to help you make your payments; most of the time you just need to call and explain the situation and they will work with you.

At this point, you probably won’t get approved for another loan to consolidate your debt so if your card companies won’t work with you, eventually you’ll have to go into default and potentially declare bankruptcy. Again, your credit card company does not want this to happen so tell them you are at risk of default and they will work something out with you.

Lastly, take a look at your budget and look for ways to cut back in certain areas (e.g. expensive coffee, eating out, shopping, cable, cell phones, etc.) so you can make your payments. If you haven’t done this in a while or ever, you will very likely find areas to cut back on but it will require some sacrifice. But keep in mind, if you do declare bankruptcy that will hurt your credit for up to 7 years and make life pretty hard in the meantime. Do everything you can to avoid bankruptcy!

Good luck…

Hi Melissa,

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Contact. They can help you to reduce your unsecured credit card debt by as much as 60 percent.