So you have credit card debt. You’ve lost your job and you can’t pay your bills. What will happen next?

With the pandemic, shelter-in-place orders and high unemployment, many people are having difficulty paying their credit cards. Different credit card companies have different options to address difficulty in payment, including a lower monthly payment, waived fees, a temporary lower interest rate, etc. Talk to your credit card company to see what options are available to you, especially if you had been paying before the pandemic.

If you are already in collections, please continue reading for available options.

NO. You cannot go to jail simply for failing to pay your credit card debt. It is also illegal for creditors or debt collectors to threaten you with arrest or any kind of criminal penalty to try to get you to pay.

If you cannot pay your credit card, your account will generally be “charged off.” This means that that the credit card company can refer the account to collections. Collections can refer the account to the credit card company’s in-house collections department or sell the account to a debt collection company. Consequently, the debt collector may have a different name than the original creditor. In order to collect the debt, the debt collectors will begin contacting you by sending letters or calling you on the phone.

Debt collectors can call and send you letters or file a lawsuit to try to collect a debt. The debt collector is not allowed to verbally or physical abuse you, lie to you, harass you, or contact your employer, friends, family or other third parties about the debt.

You can write a letter to tell a debt collector to stop contacting you. This is called a cease and desist letter. Once they receive the cease and desist letter, they are required to stop contacting you. Keep in mind that even if they have otherwise stopped contacting you, debt collectors can still file a lawsuit against you for around four years from when you made your last payment on the credit card. (Check to see what the last payment reported on your credit report is. You can get a free copy of your report at

You may be able to settle your debt with the debt collector for less than you owe. In order to get a comprehensive understanding of your options, please contact the Consumer Rights Clinic by calling 800-551-5554.

The company that owns your credit card debt will likely file a lawsuit in state court. The company then needs to serve you with the Summons and Complaint in the lawsuit by handing you copies of these documents or by giving them to another adult at your address and mailing them to you. You have 30 days from when you are served with the Summons and Complaint to file a response (Answer) with the court. If you need assistance with filing the response, please feel free to sign up for the Consumer Rights Clinic by calling 800-551-5554.

Judgments can last indefinitely. However, the plaintiff (usually the creditor or debt collector) must renew the judgement every ten years. If the plaintiff fails to renew the judgment before ten years has passed, the judgment is no longer collectible. Also, judgments collect 10% interest per year.

Once the creditor or debt collector gets a judgment against you, they can garnish your wages, levy your bank account or put a lien on your property. However, if you can show that your wages are necessary to support you and your family, you can exempt your wages from collection. Additionally, there are certain types of income that cannot be collected, including Social Security money, VA benefits, retirement benefits, GA, EDD, CalWorks, pension plans, IRA, etc. These types of income exempt from collection.