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We Setup a Payment Plan With Out Credit Card Companies But They Are Reporting Us 6 Months Late. – Mike

“Dear Lewis,

We have some credit card debt due to the economy and all.

We have called the credit card companies we owe and set up a payment plan with them to auto withdraw from our account every month. Then after 5 years we are done with them.

But after we set up a plan with them our credit report says we have not paid those cards in 6 months!! We called card companies and they said yes that’s what it;s says and they will not change the status.

And we are geting calls from those card companies debt collectors still.

Even though we have set up plans with them.

Is is better to just declare bankruptsy? Is there any legal recourse we can do to get our credit report changed and the card companies off our back?

Is is better to just declare bankruptsy? Is there any legal recourse we can do to get our credit report changed and the card companies off our back?

Mike”

Dear Mike,

First of all, I think it is always a bad idea to let a creditor automatically withdraw from a bank account. The only time I recommend it is if someone sets up a separate bank account for this purpose only. And a separate one for each credit card they are settling. That way, a bank “mistake” can never draw out more than you agreed. So one would only put in enough each month to cover that card’s agreed monthly amount.

Depending on what terms you settled the cards, the lender may very well report on your credit report that the debt has been settled for less than full amount, or that you are “late” – especially if you are paying less than the monthly minimum according to the card agreement.

I have no way of knowing based on the limited information.

I do know that monthly “late payments” on your credit report are just about the worst possible thing to have shown on your credit report.

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Depending on your amount of total debts, and your ability to qualify for bankruptcy (based on income and unexempt assets), filing might be a good option.

You should seek out a bankruptcy attorney in your area.

My name is Lewis Roberts and I’m an attorney licensed in Florida and Georgia. My practice focus is consumer bankruptcy, real estate issues/closings, and mortgages. I also have Florida real estate broker and mortgage broker licenses. I am a proud member of the National Association of Consumer Bankruptcy Attorneys (NACBA), National Association of Consumer Attorneys (NACA), and a graduate of Max Gardner’s Bankruptcy Boot Camp. I enjoy helping people with decisions that impact their financial well-being.

Legal Disclaimer: This is for educational purposes only. It is not to be relied upon as legal advice. It also does not create an attorney-client relationship. No such relationship is formed with attorney without a written agreement.

If you have a bankruptcy question you’d like to ask just use the online form.

About the author

Lewis Roberts

Florida Consumer Protection Attorney

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