When you cannot pay them... then what?

If you have proposed a settlement and you are not paying as agreed, the credit company might take you to the court and prove to the judge that you are avoiding the debts. They might try to put a judgment and you'll have to pay them through the court orders.

I suggest you to draft a realistic plan that you will be able to afford in the future. Don't propose something that you'll not be able to keep up in the future. A second job will sound helpful in covering the daily expenses.

They all behave differently. It depends on the bank that issued the card. Capitol One will charge off a debt pretty quickly and you will go to a third party collector for any amount. HSBC/Orchard Bank will use attorneys to collect very often and will eventually drag you to small claims court. If you reached a settlement and didn't pay they will come after you for the original amount prior to the settlement plus penalties interest, court costs and legal fees. It is a very good idea if you did not let it get that far.If you could be more specific I am sure that someone here will have experience with the same creditors.

It was only a proposed settlement. American Express is the creditor (don't gasp)! The original debt is $6200.

I am in the process of a divorce and have two young children (I have told this story so many times I am tired of it)... I am now living away from the marital residence with my mother and two children. The father is active in their lives, but due to the fact that he is carrying all the household expenses (on the marital residence) he is not paying me child support yet. The house is on the market, he is trying however in the interim to buy me out (the house has been on the market a year in november). SO my income covers (just barely) my expenses and that of the kids. He is contributing to their care as well. But basically it leaves me no fat in my income. I have a home business and just started a small business in addition to my full time "day" job and of course the care of two young children that are with me...80% (nearly) of the time. He is already working a second job. And really a second job that takes me away from the kids is not only impossible but not in their best interest.

I have been doing my part and keeping in touch with them.. but of course my situation has not changed and I am no closer to giving them money. Friday they offered me a deal that I pay them $.55 on the dollar. Which to me is more then fair... but it doesn't change that I don't have it and can't pay it. Financial support from friends and family was exhausted from legal fees already. I had to let my lawyer go because I had no more money to bleed. The only thing I have left is a 401K which I refuse to touch... and it wouldn't cover all my debt anyways.

SO what I want to do is gauge how likely they are to bring me to court on that amount if I can't pay them in say the next couple of months.

Try as hard as you can to not get a judgment against you. It will stay on your credit for ten years and can be collected for as long in many cases.

American Express is just recently trying to work with people. They seem to have a lot more patience. I owe them more than that and I was paying a collector 150.00 per month and thought I was paying them. Now they have the loan back and have been calling me. I think if you contact them and expain your situation they will try to work with you. Thanks for reminding me that I have to do the same thing. As far as your 401k goes it is fair game if they take you to court. They can get a lien on it. Try as hard as you can to work some payment arrangement with them.

Do you feel in a couple of months your situation will be better? Why not sign up for this site and take the free counselling from a professional. He or she will probably be able to offer some guidance. It sounds like you are still a pretty far from court. You would be contacted by an attorney first.

They said either I pay them the lump sum of $3440 right now. OR I pay them $625/ 10 months (which is of course the original amount). Neither of which is feasible. I told them I can swing only $100/month right now. Of course they said no and went on to explain that the interest alone is $150/month.

So I said ok well what do I do? They said there are no other options for me. I said ok, thank you for your time. What else could I do I am stuck. And well if my 401K is fair game then so is the house. I don't want a lien but if that is the worse that can happen I will live. And I know my credit will need alot of work when this is all settled. I have known that for some time. And I am not scared of it, nor will I live in fear of it. They like to dangle that carrot.

FYI - Amex originally sent my debt to Allied Interstate.after one phone call from them I was on the web doing research (found this forum..THANK YOU!) and sent them a letter promptly stating that I was refusing to deal with them and would only deal with Amex directly. Amex was very recpetive (because I called them immediately the next day and told them all about that lovely conversation) and immediately sent correspondence to allied interstate to not contact me anymore.

so no one knows if they have a pre-determined amount...for instance $10K???? less ... more?

I'll definetly sign up and get any free advice I can. I think this can be resolved in a few months. just got word that the soon to be ex is going forward with refinancing and all this other whoo ha to pay me off. SO it could happen NEXT month. But I have learned not to bank on anything until it actually happens. I can tell them this..maybe they will have mercy. I do doubt that though.