Expert: David - 1/17/2009

Question
I just received notice that I'm being sued by my credit card company for $2600. I wish I could pay but my financial situation is horrible.I am recently divorced and have yet to receive any court ordered payment from my ex for debts incurred during our marriage. Before I could close our account, he overdrew the bank accounts,racked up the credit cards, and went over minutes on his cell phone.  I also have an infant and have not seen a dime of the $900 monthly child support my ex has been ordered to pay. I've received eviction notices but luckily have had friends help me before the court date so we didn't get kicked out. I would be ok financially if I didn't have so much debt to get out of. I have a good job and make about $40K a year but I'm in so much debt from the divorce and pay $1500/month for daycare. My income does not allow me to get any assistance. I was even turned down at the food bank. I'm really trying, but it seems like one creditor after another. I put my credit cards off because I was told to focus on food and shelter. But now I'm being sued. I had plans to move out of state in March to go back home to live with my parents, but now I feel trapped. What are my options?

Answer
Cherie, sounds like you have a lot going on here.  If I were in your shoes the Credit cards would be one of my last concerns.  Focus on fixing your cash flow first.  The credit cards will sue you for a judgement.  All that means is they get a court to acknowledge that you owe them the money.  They'll either sell the debt or at the worst case try to garnish your wages.  That would be unusual for $2600.  Just write them a letter acknowledging the debt and tell them they are no longer allowed to contact you for collection other than in writing.  Google "sample debt collection letters" and you'll find one to copy.  The less they call you the less stress you'll have.

Dave