The Consequences of Missed Credit Card Payments

With the United States mired in the worst economic recession since the Great Depression and unemployment continuing to hover in the double digits, many consumers are now unable to make their credit card payments.

Because of this we receive our fair share of e-mail from folks asking exactly what the consequences are for missing credit card payments. Basically there’s not a lot of good news to share on the subject. It more or less goes from bad to worse.

Let’s take a look at exactly what happens to people that no longer make their credit card payments.

The first thing that they’re going to experience are letters mailed to their homes notifying them that they are overdue and that they must submit payments immediately to rectify this.

The credit card companies are within their rights to call you and mail letters to you so the next thing you’ll experience will be phone calls. If after 60 days payment is not received the credit card companies usually declare the consumer to have defaulted on their obligations to make payments and hand over their file to a collection agency.

This is where it can really get nasty. While collection agencies have certain parameters that they must legally follow, they do not always stick to them. Calls will usually begin pleasant enough but can soon deteriorate into rather nasty interactions.

Collection agencies have been known to continually call throughout the day to the point where it can be considered harassment. They will even call relatives and employers in an attempt to embarrass the individual into making payments.

While this is going on the bank or credit card company that is owed money will be reporting the failure to make payments to the various credit bureaus. This will cause the individual’s credit score to take a swift nosedive and they more than likely will not be able to attain any more credit to any kind.

Not only will they not be able to get credit but their ability to get a job or even rent an apartment can also sometimes be affected.

There will be penalties and late fees charged on the money that is owed and the individual’s interest rate will more than likely be raised to the maximum amount allowed by law. And in many cases the person will be maxed out which means that there will also be over the limit fees charged as well.

Oh, and by the way, interest is also charged on late fees too. They basically get you every possible way.

Now for the individual that already has a horrific credit rating they may not care if they do further damage to it but they must also realize that legal action is not only possible, but probable.

While the credit card company can’t have you thrown in jail they most certainly can and will garnish your wages and place liens on any property that you may own.

It’s nasty business all the way around when you stop paying your bills so by all means, do whatever you can within your power to work something out with your credit card company before these things happen to you.

Credit card companies know what’s going on out there so they are willing to work with people more so now than ever before.

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