I’m Late Paying My Creditors — And I’m Worried I Will Be Sued

When you have bills piling up that you can’t pay off, it can be a very stressful time. You start feeling like the situation is hopeless and that there is nothing you can do. It doesn’t help when your creditors start talking about lawsuits or threaten to put you in pre-litigation if you don’t pay off your defaulted loan fast.

Don’t panic, though. Even if a creditor obtains a judgment against you, it simply is a reiteration of what was already in your loan contract. If you cannot afford to pay, the creditors still cannot collect. Plus, no matter how soon you believe they will sue you for your debt, you have time to deal with the reality of your unpaid debts and formulate a plan. There are steps you can take to prepare for the worst or even avoid a lawsuit entirely.

• Open lines of communication with the creditors you owe. The first step to take is to call your creditors. Even if they are threatening to sue, they should be willing to negotiate. A lawsuit is as much of a hassle for you as it is for them, especially if they do not think that you have the money to pay them. If a simple adjustment in your monthly payments will allow the creditor to recover the entire amount loaned eventually, that is better than many other options.
• Offer a smaller settlement that you can afford. If you have a lump sum that you can offer right away that covers a certain percentage of the debt, a creditor may be willing to settle entirely before a trial. They would rather get some money rather than none at all. Just make sure to get any agreement in writing before paying off the agreed-upon portion. This may not be the best option if you have other debts, though, as it is only a small, temporary fix. You should probably only consider this if a single debt is hanging over your head and can’t be paid off, but all other debts are paid up to date.
• Be honest with yourself and your creditors about how much you can handle paying every month. Discuss what you can actually afford to pay off and don’t overestimate. Failing to pay on a new payment plan will only push you closer to a lawsuit. If you get a lowered payment, you need to be able to handle it every month.
• Get professional help. Debt counselors and other professionals have much more experience than you do at dealing with angry creditors. They can look over your exact situation to advise the best course of action. Consider retaining a bankruptcy lawyer, so that you are ready in case of any course of action. A bankruptcy attorney can represent you in case a creditor follows through on a threat to sue, help you file the formal paperwork for whatever resolution you choose, and give you honest advice about the best way to move forward.
• Look into debt consolidation. If you believe that a single lower payment will allow you to pay your creditors on time, consolidations loans sometimes make it easier to get back on your feet. Just remember, though, that the ultimate monthly payment has to be something you can afford. For many people in a lot of debt, this is not always possible.
• Consider bankruptcy. While people tend to attach a stigma to bankruptcy, it often is the best chance that underwater debtors have to get back on their feet. If you know that paying off all your debts is going to be a struggle no matter what down the road, start exploring this as an option with your lawyer now. Determining if bankruptcy is a good option early on saves you from paying a debt that will later be eliminated. Filing for bankruptcy wipes out debts entirely either through a consolidation of your assets or a payment plan over three to five years. You can eliminate many, if not all, of your non-essential bills, freeing up the money you need for rent and basic necessities.

If you start taking action towards resolving this debt right way, your mind will be better at ease. You can be prepared to face your creditors with confidence. If you fear that you may be sued by creditors in Ohio, start shopping around for an experienced consumer debt attorney right now. At Luftman, Heck & Associates, we have years of experience serving Ohio. Call us today at (888) 726-3181 to set up your free consultation and discuss your particular case with us.