Jeffrey M. Rosenblum, P.C.
A Fresh Start

What are your options if you're behind on credit card bills?

Younger and older credit card holders are increasingly falling behind on their payments, according to the Federal Reserve Bank of New York. While credit card delinquencies are lower overall than they have been in the past, they've been rising during the past two years -- particularly for people under 30 and over 60.

The credit bureau Experian also reported that the average credit card balance rose slightly between the second quarter of last year and May of this year. It increased from $6,506 to $6,553.

While neither of these trends is alarming, some consumer advocates are concerned that if they're appearing in a strong economy, a downturn could bring about larger balances and more delinquencies.

Both consumer advocates and debt management professionals advise credit card holders not to let difficulties making payments continue for long. One attorney who works for the National Consumer Law Center (NCLC) says, "I would recommend that people first reach out directly to creditors. The earlier you do, the more likely they are to work with you."

Nonprofit credit counseling agencies can help as well. They may be able to negotiate lower interest rates with credit card companies. They do charge a fee, though.

It's essential to make sure that you're dealing with a reputable agency. You can do that by making sure that the agency you're considering is certified by the Department of Justice. They designate agencies that can be used for mandatory credit counseling for people who file for bankruptcy. However, most of them also provide debt management services. Any agency you consider should also be licensed by the state.

Note that there's a difference between debt settlement agencies and debt counseling agencies. The Federal Trade Commission (FTC) warns consumers that they can end up in an even worse situation if a debt settlement agency negotiates settlements for them because many advise their clients to stop paying their bills as part of the process. Sometimes, as the NCLC attorney noted, card holders can work directly with credit card companies to negotiate a lower interest rate or a payment plan.

If your credit card debt has become so overwhelming that it's impacting your ability to pay other bills and cover regular monthly expenses, it may be wise to consider the possibility of bankruptcy. An experienced attorney can answer your questions and provide valuable guidance based on your own unique situation.

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