Finance Worries (credit card, collection agency, payment, refinance)

[Proudmom66]

A few years ago, my husband was laid off from work. We were about to lose our home when we resorted to using our credit card to pay our house note. Unfortuantely, things got worse and before I knew it, we were behind on the credit card bills. Then I refinanced our house, and the only equity we could get was 4,000.00. I sent the collection agency the money. They took it and told me I had 6 months to pay the balance of 6,000.00. Of course I couldn't do it and the collection agency just ranted at me over the phone because I could'nt pay 1,000.00 per month. Now I am being sued for the balance. I will go to court on 3/17/08. Of course I am nervous and have no idea what to expect. The collection agency still calls me. Their last call was 2/20/08 and again they wanted me to pay $1000.00 per month. What do I do? I will pay the debt, but $4,000.00 showed good faith that I want to take care of the debt, but they are refusing to work with me on a decent payment plan. Any suggestions?

[vincentnyc]

just declare bankruptcy and walk away from your home. this is the american way.

[sean98125]

Give them one last shot. Call them and tell them what you can afford to send them each month. Be prepared to show the judge the same information in court - a budget that shows how much you can afford to give them, and that you have already offered to give them that amount but they refused. The judge may still issue an order for your pay to be garnished, but it might be in the amount that you've already said you'd pay them.

I think your whole defense in court should be that you want to pay them but they won't accept a reasonable payment plan.