Today, almost all Americans are in some kind of debt, even though they are aware of what a problem it can be. When you are receiving bills that you are unable to pay off it can be very frustrating, whether these debts were incurred through college or in your adult.
The question that troubles most people is what will happen if you don’t pay your credit card bill. The first thing you should consider before you actually give up is to carry on paying the minimum. Depending on the size of your balance, this can be quite low and within most people’s means. Doing this ensures your credit worthiness and your financial future in the coming years.
If circumstances mean you can’t pay the monthly minimum then you should contact your credit card company before you stop paying. Credit companies would far sooner work something out with you rather than continually hassling you – especially if you get laid off or know that your finances are in trouble. Your attitude will determine how long you are going to be in a financial bind, it takes motivation and a commitment to honor your debts. Unless you take this approach you won’t survive in financial terms.
So, what happens if you don’t pay off your credit card bills –
If you don’t pay your credit card bills it is not costing the credit card companies a lot of money. This is because up to seventy percent of unpaid bills are underwritten by insurers and the remaining thirty percent can be written off as a tax loss.
Your debt will be sold to a collection agency for pennies on the dollar once the credit card companies feel that they are getting nowhere. This means that you are no longer a problem to the credit card company as someone else will be hassling you for the money – the problem is that collection agencies are a lot more hard faced than the credit card companies.
Some of the things that may happen to you when you don’t pay off your credit card bill are as follows –
Your credit score will go down
Your credit score is an important part of your financial future. It’s important that you try to keep this score up in case you want to apply for a car loan or a mortgage on a home. Every month that you don’t pay, your credit score goes down so the worst thing you can do is not to pay your bills..
Lawsuits may occur
You may already know that depending on the extent of your debt and how far you are prepared to cooperate with your creditors, some companies may decide to pursue you for what you owe through the civil courts. This can result in a lot more problems, the fact of the matter is that credit card companies have the money to do this and you don’t. You could be faced with the worst case scenario, having to declare yourself bankrupt.
Garnish of wages
It is rare for this option to be used in the case of unpaid credit card bills. Legally however, if you are working, then the credit company is able to take money from your paycheck – because when you are working you should be able to keep up with the monthly minimum, so don’t’ give up.
Paying the monthly minimum is vitally important if you don’t want the credit card companies to use any of these methods against you.
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