This is a common situation,
if you stop making payments, the creditor could charge off the debt and sell it to a collections agency,
which would sue you for a judgment,
if they receive a judgment they can garnish your wages and freeze your personal bank accounts.
However, in many cases you can also settle the debt for 40-50% if it goes to a collection agency if you wish.
If you file a bankruptcy, you can discharge the entire debt, and your credit score will start to improve,
by delaying the action, your score will continue to receive negative information for some time.
Be aware if the debt is over $20,000 it may be better to try to file a bankruptcy,
if less than $10,000 I would try to settle the debt,
Also, any charged off debt, can be considered income to you, and you would have to declare it as income on your taxes,
If you file a bankruptcy you would not have to worry about any tax implications
If your household income is below the state median,
you would most likely be able to file a simple chapter 7,
in NJ if you are a one person household and make less than $5096, you can file a chapter 7.
If you have any further questions please do not hesitate to ask.
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