what will happen if i dont pay my cerdit cards?
- TStoddenLv 74 weeks ago
The severity of the consequences depends on how long you don't pay...
LEGAL DISCLAIMER: I AM NOT A LAWYER, SO TAKE THIS INFORMATION WITH A GRAIN OF SALT. IF YOU'RE IN SERIOUS DEBT, YOU'RE BETTER OFF SEEKING CONSULTATION WITH DEBT CONSULTANT OR A BANKRUPTCY LAWYER TO HELP CONTROL POTENTIAL LEGAL ISSUES
If you miss a payment (intentional or not), the credit card company reserves the right to...
* Suspend the account (rejecting any new transactions)
* Enact a missing / late payment fee
* Enact an Over-balance fee (whenever you exceed your card limit)
* INCREASE your interest rate to their "Penalty Rate" (generally around 20-25% APR) for a minimum of 6 months (if you resolve all account balance issues & maintain timely payment for at least this time period, potentially longer)
* Accrue interest on your unpaid balance
* Report the payment failure to the credit reporting bureaus (damaging your credit rating)
After prolonged lack of payment (between 3 - 6 months), further consequences are...
* Account is closed (canceled) for non-payment.
* Interest may still be accrued at "Penalty Rate"
* Other fees (late / missing payment & over-balance) may be halted.
* Additional reports of non-payment on account to the credit reporting bureaus (further damaging your credit rating)
* Potentially banned from opening new accounts (until balance is resolved) with creditor
After an extended lack of payment (6+ months), further consequences are...
* Account gets sold off to a Collections Agency & written off by the original creditor
* Increased contact from said Collections Agency (typically by phone) to collect the debt, in accordance with the Fair Credit Reporting Act.
* Banned from opening new accounts (potentially on a permanent basis) with creditor
* Additional report to credit reporting bureaus of the account "in collections" (damaging your credit rating once again).
After a few years of non-payment (generally 1 - 3 years, but within the statute of limitations), further consequences are...
* Collections Agency files a civil suit (effectively suing you) for recovery of the debt
* Legal notice to the credit reporting bureaus of the civil action against you, in regards of the debt in question
If a civil suit is filed (& you are served the legal paperwork), you are required to appear in court to defend yourself (as it's safe to assume you are unable to afford legal representation. As this is NOT a criminal suit, the courts are not required to provide an attorney). The lawsuit (& the resulting judgement) will be reported to the credit reporting bureaus.
If you fail to appear in court, you will receive a default judgement against you & you are required to pay the debt + court fees, which will result in (but not limited to)...
* Garnishment of Wages
* Legal Prevention of receiving / renewing a Driver's License
* Legal Prevention of vehicle registration / renewal
* Liens on property / vehicles
* Interest accrued on unpaid balance, as dictated by the court (generally at a lower APR)
These consequences will remain in effect until the balance in question is paid in full.
If you appear in court, you may choose to settle with the plaintiff. You will need to pay the debt + court fees, but the maximum interest rate is set by the court (the plaintiff may elect to go with a lower interest rate, if desired) & you may set up a payment plan on the balance (to something more desirable). In both cases, once the balance is paid in full, the plaintiff will issue a declaration of resolution to you & the credit reporting bureaus.
If you manage to evade a civil suit & get past the statute of limitations (which varies by state / country; is generally between 2 & 15 years, depending on the format of the debt), the debt is considered legally uncollectable & general actions with the credit reporting bureaus are halted, but the current reports on the debt in question will remain on your report for the standard reporting period (of 7-10 years). Just because the creditor cannot utilize legal redress against the debt in question, they can still make attempts to collect the debt (now consider a "zombie debt").
Please be aware that such "zombie debts" can be revived (resetting the statute of limitations) if you properly acknowledge the debt OR make ANY payment (no matter how small) on the debt in question. It is your duty to request proof of the debt in question from the collection agency, which the agency must respond within 30 days in accordance with the Fair Credit Reporting Act.
If a company violates the Fair Credit Reporting Act, you can file a civil lawsuit against the offending company (creditor OR collection agency) for damages. It won't invalidate your debt, but the damages awarded from the lawsuit (assuming you win) could be used towards the debt in question, potentially negating the debt & receive a payout for the remainder.
Again, please consult a proper lawyer in regards to debt consolidation or potential bankruptcy if you're seriously behind on your bills & debts.
- Anonymous4 weeks ago
police come over and arrest you