I’ve Ignored My Debt for a Long Time and I’m Not Sure How to Proceed. – Brian


“Dear Steve,

I had about $47K in credit card debt and then lost my job and was sick and in a hospital. I was planning on filing bk, but due to the knew bk laws, I was unable to file bankruptcy. I was out of a job for about a year, and used any income I made to live on while I searched for a new job (which was difficult due to my bad credit).

I finally have a job and have saved some money, but I don’t feel real stable in the job due to the economy and need to try and preserve enough cash as possible in case I lose it and am unable to find another job (due to a resume with gaps and bad credit). My biggest debt was with Amex for about $27K and they have sent me several offers to give me an Optima card if I pay in full and a law firm offered a settlement for about $16K (but in this settlement they mentioned that it would be better to pay the full $27K as that will stop future collection efforts for the remaining balance….this left me a bit confused as to whether this was an actual settlement).

If I pay Amex it would wipe me out, and I still have about $20K in debt from other creditors who may come after me.

I occasionally get offers from some of the other creditors/collectors for settlements…can I just pay off of these and keep their letters as support that the debt was paid in full?

If I get eventually taken to court and get a judgement against me does it really make my credit even worse, even though I already have multiple charge offs? If I cleaned out my bank account and kept my cash (to live on) in my mattress does a judgement really hurt me? If I continue to not pay after a judgement was made, what happens? Since I live in Texas they cannot garnish my wages.

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Do I try and wait out the statute of limitations? Or does this make me getting sued more probable?

Ultimately, I would love to get a stable job, and pay all these debts off, but I don’t want to wipe out all my cash trying to pay off half of them and end up homeless either.

Do You Have a Question You'd Like Help With? Contact Debt Coach Damon Day. Click here to reach Damon.

Thanks for any help.


Dear Brian,

So much of your situation is based on the law of Texas where you live. I would urge you to find a lawyer, make an appointment with a lawyer licensed in Texas and go in to speak to them and get specific answers to your legal questions.

Regarding the debt settlement statement made by the collection agency, I think what they were trying to say is that it is getting to be a problem with creditors agreeing to settle a debt and then coming back years latter and claiming they didn’t and instead only got a partial payment.

This can be remedied by getting a letter from the original creditor stating the settlement deal and keeping a copy of the letter and proof of payment with your other important papers so when this issue surfaces in the future, you will have the documentation to resolve it.

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Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
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2 thoughts on “I’ve Ignored My Debt for a Long Time and I’m Not Sure How to Proceed. – Brian”

  1. Hi Steve,

    For those people who are wanting to get their credit repaired, there is a woman in SC by the name of Mary. She works for the Alexin Group. I know one can take the task of getting the remarks off their report, but it is very time consumer and her fees are reasonable. I will contact her to see if she permits me to post her contact information.

    My advise to alot of these people…don’t get involved with any debt elimination or debt invalidation programs. Don’t wait until their debts get into the hands of the collection agencies before the start making deals. If they can make the deal with the banks, they will be better off. These collection attorneys make their money by commission so the more they get from you the more they make.

    I am dealing with Discover’s attorney and they don’t want to budge. I was headed into arbitration and I asked the judge for a continuance because I am trying to get this settled. I am in one of those debt elimination programs and they offered me an attorney to settle this for me and I haven’t heard a word from this attorney. All I get when I call the office is that he is busy and he’ll get in touch with me in a couple of days…that’s been three weeks and I only have until the middle of August. The attorney started calling me again today. Since this attorney is suppose to be dealing with Berman’s office, should I talk with Berman’s office or just take notes that he called and when my attorney calls, tell him they are calling me?

    I am having the same trouble as some of the other people…Berman’s office doesn’t want to send a settlement letter, they just want me to send the money. You had answered this for me before..I sent over the letter I wanted them to sign, and you said that I was asking too much. They won’t sign anything, his office said they are the ones who write the letter after I pay them.

    Where are you coming to in PA? If you are close enough, I may come see you.


    • Evelyn,

      Thank you for the mention of Mary. The bigger issue is that it is illegal to collect money in advance for any credit repair work. Ah hell, most “credit repair” work is a scam.

      Here is what the Federal Trade Commission has to say:

      Everyday, companies target consumers who have poor credit histories with promises to clean up their credit report so they can get a car loan, a home mortgage, insurance, or even a job once they pay them a fee for the service. The truth is, these companies can’t deliver an improved credit report for you using the tactics they promote. It’s illegal: No one can remove accurate negative information from your credit report. So after you pay them hundreds or thousands of dollars in fees, you’re left with the same credit report — and someone else has your money.

      This is the first time I have heard about the Alexin Group but from what I read online they have been tied up with some bad actors in the consumer debt world. Here is what one person had to say about them:

      I have been in the program 12 mos now. I sent my CR’s to Alexin group as instructed. I was told to wait until June 11th. I waited now every creditor is calling and sending me Judgement threats! I can’t get a answer from my agent Cam or Misty from Alexin group which disputed the debts. I recieved CR’s back with nothing removed. I paid over $3500.00 for this service, 12 months later I’m still hounded..I pray that someone will email me it’s ok! that was all the money I had after loosing my job last year. Source

      Evelyn, tell me more about the Alexin Group and what they promised to do for you? I want to know.

      If you have not done so already, pick up the phone and call Discover directly and ask for that settlement letter, please.



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