How to Tell Credit Companies That You Cannot Pay an Entire Balance

Creditors may take legal action if you ignore credit card debt. If you find that you cannot pay your entire balance, contact the credit card company and negotiate a payment plan based on what you can afford. The Federal Trade Commission advises, "Tell them why its difficult for you, and have them reduce your payments to a more manageable level." Take the initiative--do not wait for debt collectors to contact you.

Instructions

1

Develop a cash flow statement by listing your monthly expenses. Decide which expenses are necessary and cannot be adjusted. Add up your monthly take-home income and subtract your monthly expenses from that figure. Decide how much income you have left each month for credit card payments.

2

Gather your recent credit card statements so that you have accurate information to present to credit card companies. You can use paper statements or view your recent credit activity online.

3

Get the telephone numbers of your credit card companies. Look for customer service numbers on the back of your credit cards.

4

Call the companies and let them know that you are unable to pay your whole balance. Use your cash flow statement to let them know how much you are able to pay each month. Work out a payment plan based on your ability to pay. Credit card issuers can often waive late fees, reduce interest charges and accept lower payments based on your needs, so suggest these alternatives.

5

Send the companies a letter of documentation that includes your full name, account number, a statement reflecting your inability to pay your full balance, agreed-upon solutions and your contact information. Make copies of these letters before mailing them.