I Know There’s A Judgment Against Me For Credit Card Debt, But There Might Be More. What Can I Do?

Question: A few years ago, we found ourselves in a very tough financial situation. So we made the decision to prioritize our bills.

Unfortunately, we fell behind in our credit cards. As time passed, we were able to settle with a few of the cards, but there are a few left that are in limbo somewhere. I know of one that received a judgement against me, and I think there are two more.

The thing is, I haven’t heard from them and I’m not sure what to do. File bankruptcy? Hire a debt settlement company? Or contact the creditors directly?

— Ullisses in Illinois

[Debt.com founder Howard Dvorkin]

This letter is REALLY revealing. Not for what the writer says, but because of what he doesn’t know.

It’s very common for smart Americans to forget to ask basic questions. Like:  How much debt do I owe? Who do I owe it to? And what’s the deadline before bad things start to happen?

Look, I get it. Figuring out your finances is way down the list of fun activities. I’ve been a financial counselor and author for more than two decades, and even though this stuff fascinates me, I know other people look at budgeting like they look at flossing: It’s important, but it’s boring.

Here’s the thing: No one will help you floss your teeth, but there are professionals who can help you with your finances.  It is important to get a debt analysis so you can learn what you need to do. And it’s even easier than flossing, because all you do is call Debt.com.

If you want to get out of debt, knowledge is powerful.

Howard Dvorkin answers…

My answer is going to be general because your question is general. In other words, I can’t be specific because you’re not completely sure how many credit cards you still have open, and which ones have judgments against you.

That said, I can offer you one specific and urgent piece of advice: Pull your credit report. Learn how here: Where and How to Get Your Free Yearly Credit Report. However, I’ll tell you to ignore one part of the advice in that report.

Because there are three credit bureaus — Equifax, Experian, and TransUnion — the law says you’re entitled to one free report from each bureau every 12 months. Debt.com and other experts advise you to pull a report from one bureau every four months. That lets you notice any irregularities in a timely fashion, then repair your credit either by yourself or with the help of others.

In your case, I’m advising you to pull all three reports right away. Your priority is finding out exactly what you owe and to who — and soon.

In my experience, if a credit card company went to the trouble to take you to court and get a judgment against you for unpaid bills, you owe at least $5,000. Any less, and it’s not really worth the trouble. (Although don’t misjudge what I just wrote: Your card issuer still wants and expects to be paid back. They have other options.)

I’m concerned that you “think” you might have more judgments against you. So I also urge you to contact your creditors right after you pull your credit reports. Rest assured, if you owe them, they’ll be able to tell you.

In these cases, I sometimes hear this faulty logic: “Howard, they haven’t contacted me, so if I ignore it, I don’t have to pay!” While it’s true that there’s a statute of limitations on credit card debt, playing that waiting game is dangerous. First, each state has its own rules, which you can see on this map.

Right now, I’d recommend against debt settlement, which has its own set of drawbacks. While you need to pursue bankruptcy at some point, that’s the very last step. Your first ones are to simply gather all your facts. Once you do that, I’d consult a certified credit counselor for a free debt analysis. You can reach one by calling Debt.com at 855-996-9980.

Have a debt question?

Email your question to editor@debt.com and Howard Dvorkin will review it. Dvorkin is a CPA, chairman of Debt.com, and author of two personal finance books, Credit Hell: How to Dig Yourself Out of Debt and Power Up: Taking Charge of Your Financial Destiny.

Quirky Questions From Perplexed People In Debt

If you had $18,000 to your name and had a credit card debt of $16,000 would you pay off the credit card?

— Matt in Michigan

Are there any grants to help me get out of credit card debt?

— David from South Carolina

I have three debts of $17,300, $4,500, and $4,000. Which one should I pay off first?

— Paula in New Mexico

How can I pay off $63,000 in credit card debt when my income is now 30 percent less than when I accrued that debt?

— Michael in Maryland

[Debt.com founder Howard Dvorkin] Every month on Debt.com, I answer questions from our readers, but some questions lack key details that would lead me to give an informed answer.

Sometimes I get asked, “How can I pay off $20,000 in credit card debt?” — and that’s the whole question! The answer depends on so many other factors. How much do you earn? How much other debt do you have? What are your other major expenses?

When there are so many questions, you really need a one on one consultation — and that is what Debt.com is for!

Debt.com can connect you with a vetted agency, where you’ll get an analysis of your situation. I urge you to do this — because here’s the good news. Whatever financial crisis you face, trust me – many others have stared down the same problems. And even better, many have triumphed over them. Because help is available. Right here at Debt.com.

Howard Dvorkin answers…

Four years ago, I began answering reader questions here at Debt.com. The very first one pitted a husband against a wife over the issue of paying down a mortgage faster to save money. Along the way, I’ve answered questions on topics ranging from credit cards to student loans to identity theft. There have also been offbeat questions like, Can I shop for Christmas presents on Dec. 26?

Sadly, I get many questions I can’t answer — not because I’m stumped, but because I don’t have enough information. Several recent ones are above. While I can’t specifically help these individuals, I can give them all some good advice, which I’ll mention at the very end…

If you had $18,000 to your name and had a credit card debt of $16,000 would you pay off the credit card?

The simple answer is: No way. Of course, I don’t know what your monthly income is. That affects the answer. Also, do you own a home? Is it mostly paid off? While Debt.com warns against a home equity loan to pay off credit card debt, it is an option of last resort.

(As we’ve reported, “Using home equity means the financing is secured using your home as collateral. If you fall behind and default, you risk foreclosure. Increasing your risk to lose your home just to pay off credit card debt usually isn’t worth it.”)

Are there any grants to help me get out of credit card debt?

No. You might be thinking of federal student loan programs, in which the government offers several ways to reduce your payments. However, the government has no plans to do that for credit card debt.

I have three debts of $17,300, $4,500, and $4,000. Which one should I pay off first?

All other factors being equal, you should pay off the debt with the highest interest rate first. That will save you the most in the long run. Whichever you pay off first, don’t miss any monthly payments. For a real solution, see below.

How can I pay off $63,000 in credit card debt when my income is now 30 percent less than when I accrued that debt?

I don’t know what your annual income is now, but unless it’s six figures, the answer is: You probably won’t be able to pay off this debt. For you and the others posing the questions above, the only truly helpful answer is credit counseling.

When you call a nonprofit credit counseling agency, a certified credit counselor will drill down on your personal situation and lay out all your options. Best of all, this debt analysis is totally free.

You might find that a debt management program will slash your monthly credit card payments by up to 30 or even 50 percent. You might even need to declare bankruptcy, which is scary, but there’s also counseling for that.

Here’s the big takeaway from today: Whatever your problem is, there’s an expert available to help you. It might not be me, if your question is too short — but it is someone here at Debt.com.

Have a debt question?

Email your question to editor@debt.com and Howard Dvorkin will review it. Dvorkin is a CPA, chairman of Debt.com, and author of two personal finance books, Credit Hell: How to Dig Yourself Out of Debt and Power Up: Taking Charge of Your Financial Destiny.

How to Answer a Civil Summons for Credit Card Debt

Get basic instructions on how to answer a civil summons for credit card debt.

How to Answer a Civil Summons for Credit Card Debt

Important note: This page provides general tips on how to answer a civil summons for credit card debt. Please be aware that articles on Debt.com are only intended to provide basic information and should not be used as a substitute for qualified legal advice. Debt.com recommends that you should always consult a licensed attorney if you have legal questions or face legal action.

Being in serious debt can be scary. While it can be easy to throw away bills and ignore calls from debt collectors, there are consequences for not paying what you owe. When a company has exhausted its resources trying to get you to pay a debt, it will either try to sue you for the debt or sell the debt to another company. This company can also sue you in order to force repayment.

Does credit card debt keep getting you in trouble? Learn how to get your debt under control.

Find a Solution

How do you know you are being sued for a debt?

Civil summons can happen when you default on an unsecured loan or fail to pay a credit card and it gets moved to charge off status. The debt is basically considered a loss by the original lender or creditor.

When you are served summons for a debt, someone will usually come to your house or work, ask you for your name, and present you with a civil summons. At this point it is best to not freak out and understand that it’s time to face your debt.

Look over the summons and see who is suing you to try and collect a debt. Is it a credit card company, a company that purchased the debt, or another creditor you are in arrears to?

Once you know this, you can start collecting any information and documents you have on the debt, including if this debt is actually yours and how long you’ve owed the money. You should also assess your current financial statements to understand your budget and what the lawsuit or a settlement may cost you.

If you know that the debt is valid, check your statements to see when the last time you paid anything to the creditor. It’s important to look at how old the debt is that is trying to be collected. States have certain rules on how long collectors can try and collect on a debt; this is known as the statute of limitations. Once a debt is past the statute of limitations, collects cannot sue you to collect a debt.

One law office provides a pretty hilarious example of what one of these summons will look like.

Three ways to answer a civil court summons for credit card debt

When you’ve been served with a lawsuit for your debt, there are three things you can do:

  1. Ignore it
  2. Try to settle the debt
  3. Go to court

While it is an option, DO NOT IGNORE THE LAWSUIT! Ignoring the summons sets you up for a rash of other issues, including wage garnishment and bank account levies and property liens. If you fail to answer by ignoring the response, a verdict can be entered against you. Ignoring a lawsuit will not protect you from the negative outcomes you can face in court!

So, you can either settle or go through the court system. Ideally, you should try to settle first and go through the court only if that fails. However, you have a limited amount of time to answer a civil summons. So, look on the summons to see when you need to file a response. Make sure to handle the case before that date to avoid more legal issues.

Step 1: How to answer a civil summons for credit card debt by settling it

First, you should try to contact the creditor listed on the summons and reach a settlement without having to go to court.

Before you call, look through your finances and create a budget. How much do you owe and how much could you afford to pay? Sometimes creditors will accept a reduced amount of what you owe, usually in a lump-sum; some may be willing to accept a small series of payments. Settlements typically run from 40 percent to 80 percent of what you owe, depending on how old the debt is and who owns it.

If the debt still belongs to the original creditor, expect to pay more in the settlement. If the debt has been sold to a collector, they may take a lesser amount, since they purchased the debt at a discount. Looking at your budget, can help you determine your stance during the negotiation. Have an amount you are willing to pay ready when you call and work from there with the creditor.

If the creditor won’t speak with you, have this call with the attorney listed on the lawsuit instead.

Out-of-court settlement is usually the best option. If you settle the debt out of court, the creditors and their lawyers can withdraw the case. You can avoid the hassle of filing an answer formally with the court.

Step 2: How to answer a civil summons for credit card debt by filing an answer with the court

If trying to reach a settlement does not work out or you decide you prefer to go to court, you must file an answer to the served summons. Note that you will need to file within 30 days of receiving the letter, including holidays and weekends, according to the Judicial Counsel of California. This time limit can vary depending on where you live. So, make sure to check your summons for the exact timing that your state requires.

Within the summons package you received should be a complaint with a list of allegations against you. It’s your job to then “answer” these allegations in writing and submit them to the court before the date listed. Within the allegations will be a section stating that you are the owner of the debt and what the amount of debt is, among other things.

This is where it is again important to have your documents handy to look through the information you have. This way, you can either confirm or deny the allegations entered against you, based on the information you have.

In your response, you will need to either affirm, deny or lack knowledge of the claims against you. You can also admit a claim is true, but state there is another reason you should not be responsible for the debt; this is called “admission with defense.” When writing your answer, make sure to refer to yourself as the defendant throughout. Your answer should be typed and printed.

Deciding whether to affirm, deny or reply lack of knowledge to a civil summons

When to affirm an allegation

If you know the answer is true, you need to answer factually in your response. For example, if the summons complaint, paragraph one alleges you live at 123 ABC Lane and you do in fact live there, you need to respond within your answer of paragraph one that you admit or confirm you live at that address.

It can be as simple as writing “Admitted” next to the number one in a bulleted list, or you could choose to write out a sentence.


  1. Admitted
  2. Defendant admits he resides at the residence listed on the complaint.

Not admitting something that is known to be true can lead to larger legal issues once the case has begun.

When to deny an allegation

If it happens that an allegation is completely untrue, you can deny the claim in your answer. Only deny if you are 100 percent sure it is untrue. If you aren’t sure, you should instead reply that you lack the knowledge to admit or deny this claim (see below). Only deny a claim if you can prove it is not correct.

You should use this option  if you believe that the claims against you are for a debt that is not yours. For example, if you were an authorized user and didn’t spend the amount listed, but are being charged with it.


  1. Denied.
  2. Defendant denies using credit card at Bed, Bath and Beyond.

When to reply “lack of knowledge”

When you are unsure of an allegation made against you, such as the exact amount you owe or the last time you paid the creditor, you can answer that you have a lack of knowledge regarding the claims.


  1. Defendant lacks sufficient knowledge to confirm or deny the information within this paragraph and therefore denies the allegation.

If an allegation contains claims that can be a combination of these answers, combine them to compose the best response.


A paragraph may claim you are cardholder of an account and that you owe $5,284.73. If you agree that you are the cardholder but deny or lack the knowledge to confirm the amount, you can answer: Defendant affirms they are the cardholder but lacks the knowledge to confirm the other allegations within the paragraph and therefore denies them.

When to use admission with defense

An admission with defense is important if you plan on fighting your debt in court. In your reply to the summons complaint, you admit to the allegation, but with a defense. When it comes to debt collection or credit card debt, these defenses would be:

  • The debt is not yours
  • That you have paid the debt already
  • The statute of limitations on the debt ran out

In these cases, you admit or affirm the paragraphs and include your defense within you answer to the summons complaint.


  1. Defendant admits to being the cardholder of the credit card ending in 2345 but contends that there is a failure to name the essential party as they are not the primary cardholder.
  2. Defendant admits to the debt but asserts it was paid on this date. (You would need to specify when you paid the debt.)
  3. Defendant admits to being the owner of the debt; however the defendant contends that the statute of limitations in the state has run out. (You would need to specify which state your debt is in and where you are being sued.)

The New York Office of Court Administration offers a full list of possible defenses as well. Complete your answer by closing the letter with the date you submitted it and put a line for your signature.

Tips for submitting your answer to the court

  • Print out your answer, sign and date it
  • Then make two copies — one for the court and one for the attorney of the creditor.
  • You will need to go down to the courthouse to submit your original answer to the clerk of the court.
  • Know that you will likely have to pay a fee to file.
  • While you are there, have them “file stamp” your other copies so that when you send one to the lawyers, they know you filed it.
  • Keep one for your records, and mail the other stamped response via certified mail to the attorneys hired by the creditor.

Are you required to hire an attorney for your debt summons?



In most cases of legal matters, it’s always recommended that you hire a state-licensed attorney. Going through legal issues without a lawyer can be tough to navigate. However, often the reason you receive a civil debt summons is because you couldn’t afford to pay. Hiring an attorney is an expense that many in this situation can’t afford.

The good news is that many state-run government websites offer legal help and advice for these situations. There are also law organizations that offer pro-bono law assistance for low-income individuals. It may be worth hiring the services of a lawyer just to understand your rights in your state. They can also answer any potential questions and explain possible outcomes based on your particular case.

The best way to avoid a civil summons is to not get yourself into that situation. Learn how to get your credit card debt under control.

Find a Solution

How Can I Wipe Out $19,000 In Debt Without Selling My House?

How Can I Wipe Out 19k in Debt Without Selling My House

How can I wipe out 19,000 in debt without selling my house? A reader has many beautiful things but also an ugly amount of debt.

When people ask me for financial advice I usually recommend many things: Credit counseling, a debt settlement program, and yes sometimes even bankruptcy. But I also spend a lot of time warning people what not to do when people are drowning in debt. It’s like they’re literally drowning.

They’ll reach for anything they think will help them stay afloat. Unfortunately very bad people out there know this. They dangle too good to be true schemes that can actually get you in deeper debt. In Anita’s case the worst thing she can do is take out a loan against her house and use it to pay off her unsecured credit cards.

That’s because if she fails to pay back to the home loan she could lose her house, but if she fails to pay back the credit cards she won’t be homeless. Instead a debt management program, or even a settlement program will probably work best for her.

It takes a little longer but slow and steady not only wins the race but it wins your financial freedom for the future.

Question: My neighbors think I have money because I have the biggest house on the block. But actually, I owe $19,000 on my credit cards!

After my divorce, I got the house. I can easily pay the mortgage, but my problem is living expenses. I have a job as an office manager, but it barely pays my living expenses. The health insurance isn’t very good, and I have several prescriptions that cost me $220 a month. (I was in an accident several years ago, and now it’s led to a chronic illness.)

Do you have any advice? Please don’t tell me to sell the house, because the mortgage payments are actually less than what rent would cost me. (We bought the house in 1999, when property values weren’t so high in this area.) 

I’m 67 years old and am worried about my future. 

— Anita in Massachusetts

Howard Dvorkin answers…

You’re facing three of the four major causes of debt, Anita. Those are: divorce, natural disaster, illness, and accident. So first of all, I want you to take a moment and be proud of yourself. You’ve persevered, and now you’re seeking professional help. Those are two admirable traits.

Now let’s dive into your situation.

Prescription drugs

This wasn’t the first item on your list, but it’s the easiest to check off. You can likely save half on your prescriptions by using a free service called GoodRx. If that sounds too good to be true — and GoodRx insists the savings can reach 90 percent — it’s not.

The company was founded by some of Facebook’s original employees and is a deceptively simple business model: Crowdsource many prescription drug users, then negotiate with the drug companies for volume discounts. Read Debt.com’s report on GoodRx.

Credit card debt

The next easiest money problem to resolve is actually your biggest: that $19,000 in credit card debt. I can’t say for sure, but you might be a candidate for a debt management program. These programs can cut your monthly payments by up to 30 to 50 percent while avoiding fees.

Again, it might sound too good to be true, but DMPs (as they’re called) have been around for decades. I can’t tell you for certain if a DMP is right for you, because that requires a more detailed debt analysis. Thankfully, you can get one for free from a certified counselor at a nonprofit credit counseling agency. How do you find one? Debt.com can hook you up with one that’s A-plus rated by the Better Business Bureau.

What not to do

I believe these two steps might be enough, but I want to warn you against doing too much. If you ask less-reputable people for help, you might be told, “Take out a loan against your house and pay off all your debts!”

That’s a terrible idea.

As Debt.com has reported

The problem with that is that you effectively convert unsecured debt into secured debt. Credit cards are usually unsecured. As much as debt collectors may threaten, they can’t take your property without a court order. On the other hand, if you fall behind on your home equity loan payments, the lender will start a foreclosure action. If you don’t catch up, you can lose your home.

Explore GoodRx, call a credit counseling agency, and read Debt.com’s report, Money Management for Seniors. You can do all that in one day — and by tomorrow, you’ll be smiling.

Have a debt question?

Email your question to editor@debt.com and Howard Dvorkin will review it. Dvorkin is a CPA, chairman of Debt.com, and author of two personal finance books, Credit Hell: How to Dig Yourself Out of Debt and Power Up: Taking Charge of Your Financial Destiny.

My Mother In Law Just Died, So What Happens To Her Credit Cards?

Question: I have a question that I couldn’t get a straight answer for. My mother in law just recently passed away. She didn’t have many assets, other than a small pension and life insurance from work. 

She DID have some money in her credit union that has my wife as a joint account holder. My mother in law also had a credit card from the credit union that has a balance. My wife is NOT on the credit card, just the checking account.

Will the credit union just take the amount of the balance out of the account? Or do they have to go through the courts to get payment?

— JP in California

Howard Dvorkin answers…

First of all, my condolences on the passing of your mother-in-law. Second, this isn’t what you wish to hear: You should consult an attorney.

Why? Because there are some complicated variables at work here.

What Happens To Your Credit Cards When You Die

My mother in-law just died. So what happens to her credit cards? A readers wife is wondering what happens to her mother’s assets and debts.

Noone enjoys talking about that especially if it’s your own, but certainly your loved ones also. Maybe that’s why less than half of all Americans have wills according to art. That’s a shame because families have enough to stuggle with when someone dies.

Adding financial burdens only makes it worse. Even if you don’t create a will you could still take precautions to ensure your money gets to your loved ones. In today’s example the mother-in-law could have transferred some assets in advance to her daughter and her daughter’s husband.

Since most debts die with you other people can’t be forced to pay them off. Noone wants to hear the words “you need a lawyer”. Well, when it comes to estate planning it’s worth the effort.

What you spend on either a lawyer or a reputable online service will save you money and possibly legal trouble in the future. And, once you get past this unpleasant topic, you have peace of mind for the rest of your life.

For more details on this and other topics check out Debt.com.

Typically, when someone dies, any outstanding debt is a liability of their estate. If that person dies with money in the bank, that money pays off those debts. What if there’s no money left at all? Creditors will attach a claim to the estate, but it’s not usually worth their time to pursue it.

Normally, most credit card applications include a clause that allows the financial institution to attach other assets held by the same financial institution. In other words, your mother-in-law’s credit union might have rules that allow it to take money from the joint bank account to pay off the credit card.

Notice how I use words like “typically,” “usually,” and “normally.” That’s because I’m not sure what rules your particular credit union has. I also don’t know if the title of the bank account is “joint tenancy with right of survivorship.” If so, I believe the funds can’t be confiscated by the creditor.

I urge you to contact a lawyer who has experience in estates, because each state can have different laws.

One possibility, but with a big warning…

You might consider withdrawing all the funds in the joint account so no one can get to them first. However, I don’t know which of the two owners actually contributed the money to the bank account. You could get yourself in a bind if it was your mother-in-law — you might be breaking a law. So you can see why I’m so adamant that you consult an attorney.

Finally, you need to consider the return on your time and expenses. You don’t say how much money is in the joint bank account, or how much is owed on the credit card. If the amounts are smaller than an attorney’s fee, you might want to forget the whole thing.

Have a debt question?

Email your question to editor@debt.com and Howard Dvorkin will review it. Dvorkin is a CPA, chairman of Debt.com, and author of two personal finance books, Credit Hell: How to Dig Yourself Out of Debt and Power Up: Taking Charge of Your Financial Destiny.

Can A Credit Card Company Sue You After 7 Years?

Question: I was reading on the Internet that if I don’t pay off my credit card bills in seven years, it’s too late for the credit card companies to sue me for not paying. it’s like the statue of limitations for certain crimes. You’re off the hook.

My wife says that’s crazy and wants me to consult an expert. So that’s why I’m writing you. Is this real or not? I hope it is, because I got something like $12,000 or $13,000 on seven or eight cards. It might even be more now.

— Pete in Delaware

Howard Dvorkin answers…

Questions like this one both sadden and frustrate me. I hear them frequently, and I always reply the same way: A little knowledge can be a dangerous (and costly) thing.

In this case, Pete, you and many other people are confusing two different concepts. First, there is a time limit regarding these debts. Second, it’s called a statute of limitations. Third, it’s not what you think.

Can A Credit Card Company Sue You After 7 Years?

Can a credit card company sue you after 7 years? Credit cards are very complicated and so is the law. When you combine those two things you could easily get overwhelmed. That’s why this question about the statute of limitations is so important.

Here’s the problem, there are dozens of statutes of limitations, each state has their own. They determine how long the collection agencies have to sue you for not paying your debts. After that time, they can’t take you to court, but they can keep bugging you to pay up because your debts haven’t disappeared. Then there’s the Fair Credit Reporting Act, a federal law that says many things, but one of them is this: “most negative items on your credit reports must be removed after seven years”.

So again, the debt is still there but anyone pulling your credit reports won’t see it. I wouldn’t recommend waiting around for years hoping you won’t get sued. That’s a stressful way to live and if you do get sued you could end up getting your wages garnished.

Your best bet is to call a professional now for a free debt analysis. Who do you call? Debt.com of course!

If you’ve stopped paying your credit card bills, your card issuer will probably sell your debt to a collections agency after six months. That agency now has as few as three years and as many as 10 years to take you to court and sue you for that debt.

Why the big range of years? Because it depends on which state you live in. Each sets its own rules, and those rules can vary in the details. Thus, it’s impossible for me, in this limited space, to list all the variables. Debt.com assembled this report, which has an interactive map that shows you all the complicated details by simply rolling your mouse over your state.

Now, just because you can no longer be sued for your debts doesn’t mean they’ve gone away. They’re still there.

The reason you’re probably citing seven years, Pete, is yet another rule. This one comes from the Fair Credit Reporting Act, or FCRA. This federal law states that most negative items on your credit report must be removed after seven years.

That doesn’t mean collection agencies won’t still hound you. While they can’t bother you at all hours or make threats — thanks to another law called the Fair Debt Collection Practices Act — they’re not likely to ignore such a large sum.

As you can see, you’re risking a lot by ignoring your debts. If your creditors do sue you, and if they win, you could face wage garnishment. While that’s an extreme, read What Happens If I Stop Paying My Credit Cards? to learn all the scary possibilities.

Before you play chicken with your credit card issuers, Pete, I recommend something else. It won’t cost you anything but some of your free time: Get a free debt analysis from a certified credit counselor. Learn more here. Pete, you might find you have far better options than living several stressful years waiting and wondering if you’ll get sued.

Have a debt question?

Email your question to editor@debt.com and Howard Dvorkin will review it. Dvorkin is a CPA, chairman of Debt.com, and author of two personal finance books, Credit Hell: How to Dig Yourself Out of Debt and Power Up: Taking Charge of Your Financial Destiny.

How To Pay Off Credit Card Debt When You Have No Money

Question: I’m broke but have $11,000 I can’t possibly pay on my credit cards. What do I do?

Question: Every month, I get my credit card statements, and I get so stressed out. I have something like $8,000 on maybe five or six cards. There’s no way I can avoid bankruptcy, is there?

Question: Think I’m doomed. I got so much credit card debt, it equals three months’ pay. I don’t own a house, so i can’t even mortgage that to pay the bills. Is there anything else possible?

How To Pay Off A Credit Card Debt When You Have No Money

If there’s one question I’m constantly asked more than any other it’s “how can I pay off credit cards when I’m thousands of dollars in debt?”. At some point it feels like a horrible comedy, doesn’t it?

Guess what?! You need professional help! Believe it or not, you’ll partly get help from the credit companies themselves. They work with credit counseling and debt settlement agencies to help you get out of debt.

They freeze late fees and penalties and can roll everything into one monthly payment. The credit card companies are motivated to help you for one simple reason. They realize that you might be so far in debt, they won’t get any of their money back.

So they cut off their profit margins to get you back on your feet. That way they can recover some of their money. However, they only do by working with agencies they trust and in a very structured program.

These programs have been around for decades and have helped millions and millions of Americans. You heard me right… millions! Get the whole story below and if you need help, call Debt.com today.

Howard Dvorkin CPA answers…

The emails above are just a few I’ve received recently. By far, this theme is the most common among the questions I’m asked.

That’s shocking but not surprising: Credit card debt in this nation has topped $1 trillion. So I expect these questions will arrive in my inbox ever more frequently, and even though I hear these horror stories all the time, they continue to scare me.

Credit card debt is especially insidious because even when you’re in too deep, you can keep right on going. Making those minimum payments can deceive you into thinking, “I can catch up.” It’s like losing all your money gambling at the blackjack table, and with your last $20 thinking, “If I can just hit 21, I can get on a hot streak and come back.”

Let me begin to address these common questions like this: The definition of insanity is doing the same thing over and over again, yet expecting a different result. You won’t get out of credit card debt by using money as you always have.

With that said, here’s some quick advice for salvaging even the most stressful credit card debt…

1. Credit counseling

This is the first step, and it’s crucial. It’s also free.

Credit counseling agencies are nonprofits. Some are better than others, but the best offer you a free debt analysis from a certified — that means trained and tested —credit counselor. You can’t get out of debt until you know how you got into debt. A debt analysis will show you exactly what your options are.

Read more: What Is Credit Counseling And Why Do I Need It?

2. Debt management program

This is the most powerful tool for getting rid of credit card debt. A DMP, as it’s called, can reduce your monthly payments by 30 to 50 percent and freeze all late fees. Basically, your credit card issuers agree to forgo much of their profits to get paid back the principle you owe.

Sounds easy, but there are some hard rules. For instance, you can’t run up any new credit card charges — because that’s what got you into trouble in the first place. Depending on how much you owe, it can take a few years to pay it off. Then again, those who emerge from DMPs report a sense of happiness and lack of stress they haven’t felt in years.

Read more: Debt Management Program Pros and Cons

3. Bankruptcy

This is your most severe option, but it’s neither dangerous nor embarrassing. As my fellow financial expert Steve Rhode has said, “bankruptcy is better for consumers than financially limping along.”

Of course, there are drawbacks. If it were easy, everyone would do it, and frankly, not everyone should do it. Certainly, no one should do it without consulting an expert.

Read more: The Pros and Cons of Bankruptcy

Bottom line

Don’t waste another day stressing out about credit card debt — or ignoring it or whining about it. You have choices. Some are easier than others, but all are proven ways to get out from under this burden. You have no excuse. Do it now. You can even call Debt.com to find experts in any of these fields to help you.

Have a debt question?

Email your question to editor@debt.com and Howard Dvorkin will review it. Dvorkin is a CPA, chairman of Debt.com, and author of two personal finance books, Credit Hell: How to Dig Yourself Out of Debt and Power Up: Taking Charge of Your Financial Destiny.

Am I Responsible For My Spouse’s Credit Card Debt?

Question: My wife and I have been married only a year, but already I see a problem. She came into this marriage with about a $6,000 balance on a couple credit cards, and that’s only getting bigger — even though we got a new place together and are spending less than when we were single! 

She likes to go on her “shopping therapy” trips with her single friends who are having relationship problems. But it’s causing a problem in our relationship because I don’t want to be responsible for her debts. She says the credit cards are in her name, and it’s not my problem. But what about her credit sore if we want to buy a house later?

 I should mention she declared bankruptcy once when she was younger, and she says if she needs to again, she’ll do it in her name. So she tells me to get off her back. Is she right about all this?

— Andre in Texas

Am I Responsible For My Spouse’s Credit Card Debt?

They say love conquers all, but I’ve been a personal finance expert for more than two decades, and I can tell you that credit card debt can conquer your love.

It takes time, but like water carving out the Grand Canyon, credit card debt will put you in a deep hole. Besides the stress that debt adds to a relationship, big credit card balances can drag down the finances of a spouse who’s financially responsible.

Especially if they live in one of the nine states known as community property states. The law considers a married couple to be one person, in general, that means if one spouse runs up big debts, both spouses are responsible for it.

So you are really in it together. A debt can conquer love, what can conquer debt? I urge all couples with debt to get a free debt analysis from a certified professional to find the best solution. To keep the love alive! Read the rest of my advice below…

Howard Dvorkin answers…

Your wife is wrong. If she didn’t live in Texas, she might’ve been right.

Sound confusing? It is. Nine out of our 50 states are known as community property states. These states — Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin — consider all the property and debt acquired in a marriage to belong to both partners. That stands even if only one spouse made money or lost money.

In a divorce, that means the spouses evenly split the profits and debts of their marriage.

This means the credit bills your wife rang up before you were married is hers alone, but the new credit debt she’s incurring belongs to the both of you. This also means: You’re equally responsible for her debts if she declares bankruptcy.

I must add the following two words to everything I’ve just written: generally speaking. When you mesh debt with bankruptcy and community property laws — which vary some in different states — it’s impossible to list all the variables in one answer.

What I can say with 100-percent certainty:

  • If your wife gets to the point where she contemplates another bankruptcy, she (and you) need to try pre-bankruptcy credit counseling. This counseling, which can cost as little as $50, might actually spare you from having to declare bankruptcy at all.
  • Your girlfriends needs to immediately get a free debt analysis from a certified credit counselor at a nonprofit credit counseling agency. Credit counseling is, hand down, the best way to avoid credit card problems later on.
  • The both of you need to have an honest talk about money. How you save it. How you spend it. What your goals are. I urge you to create a budget. Here’s some advice on how not to create a budget.

Here’s a depressing prediction, Andre: If you and your new wife don’t confront your money differences and resolve them as a loving couple, you might not be a loving couple for long. Debt has a way of weakening the strongest bonds.

Have a debt question?

Email your question to editor@debt.com and Howard Dvorkin will review it. Dvorkin is a CPA, chairman of Debt.com, and author of two personal finance books, Credit Hell: How to Dig Yourself Out of Debt and Power Up: Taking Charge of Your Financial Destiny.

Why Is It Bad To Have Credit Card Debt?

Question: I think I have around $9,000 or $12,000 on something like six or seven credit cards. My girlfriend thinks this is a national emergency or something, even though I got so many points that I got us upgraded to first class for nothing when we flew to Houston to see a World Series game and got a better hotel room, too.

Can you tell her this is how the rewards game works? You got to spend money to make money, right? I love this woman, but she drives me crazy with her old-school outlook on money. 

— Devon in California

Howard Dvorkin answers…

I’m sorry, Devon. You’ve come to the wrong place to dismiss “the old school.” I embrace bleeding-edge technology and creativity on many topics, but when it comes to debt, I’m downright medieval.

I controversially wrote a book that declared…

Learning to live without a credit card is an integral part of financial empowerment. If you don’t use credit cards, you will begin to take your money more seriously. The act of physically handing over dollars and cents to a cashier or waitress generates a feeling of loss. That money is gone. When you hand over a credit card, you can worry about that bill later — or you might not think about it at all.

Let me break down your situation, Devon.

First, it’s been proven many times over: Rewards points don’t eclipse credit card debt. In other words, it’s not worth the points if you’re carrying a balance.

The average credit card is charging around 15 percent interest. The average reward point is worth between one and two cents. That math doesn’t work in your favor.

Think about it this way: Credit card companies aren’t in business to lose money. If they offer you a freebie, it’s because they know they can make it back — and then some.

Those credit card companies realized long ago that many customers will be lured to their rewards program but still carry hefty balances that will more than make up the difference.

Devon, you mention the term “spend money to make money.” As a business owner myself, I agree with that concept. However, that’s not the case when it comes to personal debt. The term applies to expanding your business so you can earn more than you’ve spent. It often involves borrowing, but it a very calculated way — and at risk to the company, not your personal savings.

I implore you to look beyond the rewards you’ve won. Instead, look at the interest rates you’re paying. Do the math. One sign that you’re not being prudent: You’re not even sure how much debt you have on how many cards. If you don’t know those numbers, how can you be so sure you’re making more than you’re spending?

Finally, I implore you to listen to your girlfriend. From what little I know, she sounds wonderful.

Have a debt question? Our team of experts will get you the answers you need.

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How Long Does It Take For Your Credit Score To Go Up After Paying Off A Credit Card?

Question: I had nearly $5,000 on four credit cards that I was carrying for years, but then I read what you had to say about getting rid of it [Reduce Credit Card Debt in 5 Easy Steps]. So I did that. Believe it or not, next month I should have everything paid off!

So thank you for that, but now I have a question: I need a new car and want to make sure my credit score takes into account how I paid off all my credit cards. I know that a higher credit score will mean a lower rate on a car loan. How long do I have to wait?

— Regina in Michigan

Howard Dvorkin answers…

The answer to your question is quite simple. The reason for the question is more complicated.

Thankfully, it doesn’t take long for news of your good deeds to spread. Most lenders, and that includes companies issuing credit cards, update their account information once a month. That means they report new information to the Big Three credit bureaus — Equifax, Experian, and TransUnion — every 30 days or so.

That said, I’d give it 45 days to ensure everything is logged everywhere. By then, your credit reports will be up to date. Your credit score is derived from that. However, you might not notice a bump in your score for months.

Since you’ve already followed one Debt.com report, I urge you to read another: How to Improve Your Credit Score Step-by-Step. You’ll find a more detailed explanation on how soon credit scores reflect improvements, plus steps for ensuring your hard work is recognized.

That said, I’m concerned by your five words in your question to me: “I need a new car.”

Do you really?

One of Debt.com’s partners is Money Talks News, an excellent personal finance website run by Stacy Johnson. He owns a big house on the water in South Florida, owns a boat — and has never bought a new car in his lifetime. He even wrote an articled called Why I Don’t Buy New Cars, in which he writes, “Paying interest to finance a depreciating asset is not how you get rich.”

I’m focusing on this, Regina, because I see your situation all too often: You’ve just completed a Herculean task and paid off those stubborn credit card balances that have been dogging you for years. yet you’re ready to go right back into debt, this time for an auto loan.

Instead, I have a recommendation that I know will sound boring and parental: Buy a used car, and only as much as you can afford. It won’t be an attractive vehicle, but if you can sacrifice for just a little longer, you’ll have time to save money.

Paying off debt is worthy of applause, but if you can set aside money for an emergency fund and even retirement, then you deserve a standing ovation. Don’t stop now, Regina. Build on your success.

Have a debt question?

Email your question to editor@debt.com and Howard Dvorkin will review it. Dvorkin is a CPA, chairman of Debt.com, and author of two personal finance books, Credit Hell: How to Dig Yourself Out of Debt and Power Up: Taking Charge of Your Financial Destiny.