I received an email looking for financial advice for a young worker living paycheck-to-paycheck, who recently discovered the existence of an old debt thanks to the collectors who came calling. I wrote back suggesting negotiation with the debt collectors by showing the amount could be paid back over a period of time, but perhaps readers can offer some additional suggestions. Here is the full story:
Katie is a 23 year old living in Utah. She works a full time job, pays rent on an apartment, and has a car payment. She has about $6,000 in debt that she has been managing over the past couple of years. However, this week she received a letter regarding a credit card she forgot she had while in college in Georgia. I guess the debt collection agencies had been sending her notices to her old dorm address, and finally hunted her down. She now owes an additional $3,300 on this credit card in 2 weeks or she goes to court. Going to court means losing her car and having her credit ruined.
Katie is considering one of those loan places that charge a huge amount of interest. I know this is a cringe-worthy solution and I am wondering if you are aware of any legitimate loan places or programs that could help her overcome this $3,300 debt and help her begin paying off the other $6,000.
She’s pretty much month-to-month on the paychecks. Her family situation is such that she is uncomfortable asking them for money.
I’m at a loss, but I REALLY don’t want to see her go to one of those skeezeball loan places. Any thoughts at all would be extremely appreciated, and thanks so much for reading.
Published or updated February 25, 2007. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.