How to Deal with a Bank on Credit Card Debt You Cannot Afford to Pay

The bank is not your friend. But nevertheless, many financial experts advise you to be honest with the bank to which you owe credit card debt about your financial situation. They advise trying to work out some sort of payment plan at a reduced interest rate. Here is how handles that advice.

You should attempt this, so when it does not work, you will have a more realistic grasp of your situation. The simple fact is a bank will never negotiate with you, if your credit card account is current.  What the gentleman the this video describes is true.  The bank will negotiate with you if your debt is four-six months late.  But, you must be prepared to make a lump sum settlement for 30 or 40 percent of what you owe.  Regrettably, most people who cannot afford to pay their credit card debt do not have any money for a lump sum settlement.

The first question to ask yourself and force yourself to answer is, “Can I afford to pay this debt?” If you are sacrificing monthly essentials – rent/mortgage, utilities, food, clothing, medical insurance, education loans — to make minimum credit card debt payments, then you obviously cannot afford to pay your unsecured credit card debt.

Then the next question should be, “What are my options, if I stop paying?” But, in your mind it is probably, “What if I receive a summons for this credit card debt I stopped paying?” Unfortunately, it is your constant worry about the answer to this last question that will cause you to make bad decisions when considering your options about what to do with this debt.

So to successfully put this debt behind you, before you start down the road of nonpayment, you need to be fully educated about the nonpayment of credit card debt. And, you need to have a plan in place for how you are going to handle the bank, debt collectors, junk debt buyers and collection attorneys.

Once your payments become late or stop, you will be turned over to the bank’s in-house collection department. Their goal is to get you current again, to convert your loan from a non-performing loan back to a performing loan, and to prevent your credit card debt for being written off as a bad debt after six months of non-payment.

Your state’s statute of limitations (SOL) for how long a creditor has to sue you for a debt (usually 3-6 years) starts counting with your first missed payment. It stops counting with any subsequent payment, and then starts from the beginning with another subsequent missed payment.

The bank’s collection department may offer to work out a payment plan. One that is heavily laden with contingent interest and penalties, so that if you miss a payment, most of the money that you paid into the plan gets eaten up by those penalties and interest. While it “saves” the credit card account for the bank, it restarts the SOL for you.

As your credit card debt gets closer to its six-month default date, the bank will probably raise the specter of legal action. The bank is not considered a debt collector by the FDCPA, so you cannot instruct them to cease all collection activities per the Fair Debt Collection Practices Act (FDCPA). Nor, can they be prevented from making threats about legal action.

They will call you more frequently as the six-month date of default approaches. If you cannot pay, it really does not matter whether you answer the phone or not.

You may hear from a third-party debt collector before the six-month default date.   That usually means that you will have to deal with the debt collector and not the bank. But, if you are offered an attractive settlement, you should confirm it with the bank, and never pay the debt collector anything. When you are contacted by a debt collector, then you can use the letter in my materials to tell the debt collector, who is covered by the FDCPA, to cease all collection activities per the FDCPA.

The Consumer Finance Protection Bureau has made an effort to consider banks as debt collectors under the FDCPA. Here is a good discussion of that topic by the American Bar Association.

Once your bank is forced to declare your credit card debt a bad debt at six months of non-payment, it will stop calling your about that debt. Then its assigned debt collector will take over. At this point if you have educated yourself, you will know what to do. You can read my materials for how to deal with debt collectors, junk debt buyers and collection attorneys by accessing them here.


  1. Dolly Brown says

    I am a 63 yr old disabled female. I had a company call me and talk me into committing myself to charging $30,000 to credit cards for grants that were suppose to be available about now. When I called yesterday, the call was cancelled. That tells me they are no longer in business. I only draw about $1,800 in disability and pension total. My husband doesn’t know anything about this, and he is retired. He has his own account and doesn’t help me at all with my bills. I am drowning in debt. I have a $427. truck payment on top of these credit card payments and I owe about $1,000 in medical bills I can’t pay right now. I don’t know what to do.we own our home, and I thought about stop paying on these credit cards. They were robo signed. I’m afraid they would try to take our house. We live in Tn. My identity was stolen some time back. Could you help me?

    • says

      Obviously, there is no money to pay the credit card debt. So you should use your limited income to pay for your truck and living expenses.
      Beyond that I can not help you without a lengthy telephone conversation. You are welcome to buy my books with telephone support for $97 which come with a 60-day money back guarantee.

  2. says

    Dealing with Banks for credit card debt is now a days become more difficult if the person has a mortgage loan. Its not my opinion its my uncle Krisotfers . He is now 73 trying get debt free credit cad facilities but authorities rejected due to his huge amount mortgage.
    By the way your article is very helpful for all also above comment have required information that I was looking for.

  3. says

    Keeping your debt at a manageable level is one of the foundations of good financial health.
    Great and informative article indeed! Thank you so much for sharing this one with me.

  4. Kerry says

    I have a question, I am single, 71, and live in HUD housing. I have a credit card that currently has $2.223.00 and I have been making the minimum payments monthly which are going up every month now, most of the debt is from having to move twice and rolling other amounts into this card via a bank transfer, yesterday they sent me a letter about flex plan (which I do not want) I am not in collection nor have I missed any payments, I have two other loans thru Lending Club I pay on every month. I am in a financial pickle and soon will not be able to keep up. Would I benefit from your book at this time? Thank you.

  5. Sharon says

    I don’t notice any current comments on this site. Am concerned sending payment for books of being scammed. Also if you are who you say you are and legitimate. Can purchases of one book at a time possible?

    • says

      This website is not a scam. If you read enough posts you will see relevant comments. These ebooks are real. For anyone concerned about being scammed I offer a 60 money back guarantee. In addition I also publish my phone number on the site. And, YOU are welcome to call me to verify my sincerity 508-796-5101. Mel

  6. Bonnie says

    Hi Mel. Your information have given me some hope. I’m 64 about 37, 000 in credit card debt and $260,000 mortgage like you business is slower , I foresee not being able to pay on my never ending card debt. Will your material set me on the path to recovery? Thanks BonnieJensen

  7. Amanda C says

    I can’t afford to pay the minimums on my credit cards. But what if I can afford to pay a little less than half of what the minimum is? Should I do that or not make payments at all?

    • says

      The Blog post “How to deal with a bank . . .” answers your question. It sounds like you are afraid to admit to yourself that you CANNOT afford to fully repay the debt. If that is the case, then you have to stop paying and find a way to make that work. The longer you keep your head in the sand, the more it is going to cost you. You need to do research and read more.

  8. Nariyah M. says

    I have $32k in credit card debt due to medical expenses, no job, and surviving off of the cc. I’ve exhausted every source of income and I’ve been borrowing money to stay current, hoping to land a job soon. Am I able to be helped?

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