Pay If You Can
If you have the ability to repay your debts, you should. Paying will improve your credit score, allow you to get low interest car and house loans, help earn you lower car and life insurance rates, and save you thousands of dollars in interest.
If you feel overwhelmed by your debt, or if you don’t know where to start, read Solve Your Money Troubles; Debt, Credit & Bankruptcy by Nolo Press. ($24 by Mail/$17 by PDF Download)
But keep in mind it almost never makes sense to use IRA, 401(k), or retirement money to payoff credit card debts. It also seldom makes sense to take out a home equity loan to pay credit card debt. Talk to an attorney before you either.
Understand What Happens If You Don’t Pay
If you fall behind on your bills in Rhode Island, I suggest you read this handout prepared for Citadel clients: Debt Defense Information for RI Consumers It explains some of what creditors can, and cannot, do to force you to pay.
Don’t Be Bullied By Debt Collectors
If a debt collector is harassing you, abusing you, or lying to you he/she is breaking the law; you can sue them and potentially put thousands of dollars in your pocket. This Federal Trade Commission site explains a little about federal Fair Debt Collection Practices Act – the law the protects you from abusive debt collectors.
Contact Citadel if a debt collector is harassing you.
Resources for Attorney
Here is a copy of the Rhode Island Fair Debt Collection Practices Act. It is similar to the federal FDCPA but it is not identical.