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what does it mean when your credit card company says theyre going to take you to a collections agency??

i have fallen behind the last 2-3 months, i still pay SOME, just not all..and i got a phone call today, and i explained to them my situation and everything, and they said i have 2 weeks to come up with $400, otherwise this will be turned over to a collections agency....what does that mean?? im so scared!! ive already cashed in all my savings..all my vacation money thru my work..i literally have nothing!! i got paid last friday, my paycheques are only like $250/2 weeks..i dont know whats going to happen!!

 
alexis_06

Asked by alexis_06 at 1:38 AM on Nov. 16, 2010 in Money & Work

Level 42 (146,031 Credits)
This question is closed.
Answers (8)
  • Well, it means that they will no longer be handling your account, a collection agency will be billing you, and probably calling you to pressure you to pay them. It will go on your credit report. I would call a credit counseling agency, make sure it's a legitimate non-profit agency, as some can just get you into further trouble by charging you. They can get the creditors to stop harassing you, and get your payments lowered, but it will still probably affect your credit score.
    ohwrite

    Answer by ohwrite at 1:42 AM on Nov. 16, 2010

  • also, if you and or hubby work and they call your work, you can tell them they cannot call your work. It is a law that once you have informed a collection agency that they cannot call your work, they have to stop by law. good luck
    beyondhopes

    Answer by beyondhopes at 1:46 AM on Nov. 16, 2010

  • We've actually had good luck. The collection agency was more willing to work with us than the damn credit card company. Also, call your credit card company an request credit help information. Ask if they have any programs or plans that can help you get back on track. They typically won't tell you unless you directly ask for them.
    katzmeow726

    Answer by katzmeow726 at 1:53 AM on Nov. 16, 2010

  • Good luck. A lot of people go through difficult times, but you can work your way out of it. Just deal with it one day at a time, and remember, you can only do what you can do, so if you're doing your best, that's all that can be expected. Don't be hard on yourself.

    Wishing you all the best.
    ohwrite

    Answer by ohwrite at 1:56 AM on Nov. 16, 2010

  • Collections agencies are actually bound by more laws than your credit card company is, so they can't harass you as much as the credit card company can. Collections will hound you for money, and if you don't pay it, they will likely take you to court. In the meantime, the credit card company is probably going to close your account. The collections transfer will show up on your credit report for 7 years, as will any legal action. Worst case scenario - if you don't pay and they take you to court, they can garnish your pay check of up to 25% of your pay, and you will also have to pay court ordered interest and their legal fees. That comes out before your other deductions like insurance. Best case - they decide you aren't worth the money to sue (if you have a low, but delinquent balance), and they'll bug you about it, but not actually do anything. You can send a cease and desist letter if they call too much.
    NotPanicking

    Answer by NotPanicking at 2:26 AM on Nov. 16, 2010

  • Call the number of customer service on your card and verify there is a problem. Go over what is wrong and why, especially if you are making some payments. Make sure they have received your payments. I am concerned that this may be a scam. Usually ultimatums like you describe are not given over the phone. Make sure this is not some sort of scam. GL
    elizabr

    Answer by elizabr at 7:29 AM on Nov. 16, 2010

  • It means they no longer want to deal with you so they are going to let the collections agency get the money from you. It also means you're credit score is going to lowered.
    HotMama330

    Answer by HotMama330 at 11:32 AM on Nov. 16, 2010

  • no they havent called my work yet, that im aware of...and there is no husband..its just me :(
    alexis_06

    Comment by alexis_06 (original poster) at 1:50 AM on Nov. 16, 2010