Credit is a wonderful thing… until you find yourself behind on payments. Then you will discover the extent to which the credit companies are definitely not your friends.

Go ahead — give it a try. Don’t make even the minimuum payment on your credit cards for a couple of months and see what happens. (Actually, I wouldn’t recommend it. Instead, let me walk you through a typical scenario.)

So, for what ever reason, you cannot make the required payments on your credit cards. Generally, after the first 30 days or so (or sooner), you will start receiving “friendly” reminders in the mail or polite phone calls reminding you of your missed payment. These will say things like, “If this is an oversight and you’ve already sent your payment, thank you.”

Miss another payment and you’ll start hearing things like, “Your credit is your best asset – make sure you don’t ruin yours; send payment today,” etc. The phone calls you receive will start increasing in frequency as well. Once your payments are 90 days past due or more, the letters and phone calls will become more threatening in tone. There will be more talk of ruined credit, and perhaps threats of lawsuits. You may start receiving some settlement offers, or offers of “help” from the refinancing department.

As you approach the time for a “charge off” (the date the credit company writes off your debt), you will definitely be getting phone calls — several each day, from different people in the company each time. You will find yourself having to explain your situation to one person, only to have to start all over in an hour with someone else. Don’t expect a charge off to end this madness either. It’s almost a certainty that the credit card company will turn your account over to a debt collection agency, and the letters, phone calls, and threats will start all over again.

Finally someone, either the creditor, a collection agency, or someone that buys your debt, will sue you. And if you lose, it’s extremely likely that you will end up having your wages garnished.

Don’t let this happen to you. If you find yourself in a position where you don’t think you will be able to pay your credit card debt, take steps immediately to deal with the situation. Contact a debt management company to help you get a handle on things and perhaps negotiate with your credit card company for lower payments or more favorable interest rates. If the situation is particularly bad, you may even want to seek assistance from a debt settlement company, who can help you get your balances reduced without going through bankruptcy.

Whatever you do, do something. This is definitely not a time where you can sit back and hope for the best.

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