What happens if I stop paying my credit cards?

Home Forums Credit Cards What happens if I stop paying my credit cards?

Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • #32775
    Jordan Moore
    Keymaster
    #32789
    Jordan Moore
    Keymaster

    Completely ignoring your credit cards and not paying them off can lead to even more debt and a tanked credit score, but let’s put it in perspective.

    The good: If it’s a one-time thing (you had an emergency come up that put you over budget), or something that doesn’t happen very often then you can likely work something out with your credit card company. 

    Many credit card companies offer assistance programs or hardship options for customers facing temporary financial difficulties. Call them up and explain your situation. They may be able to grant you a grace period, waive fees, or modify your payment plan. You’ll want to take this approach because if you just ignore the problem and don’t pay for a month you could end up owing more in fees and get a negative mark on your credit report.

    The bad: If you don’t address your credit card debt for a while, things can quickly spiral out of control. Initially, you’ll face late fees and increased interest charges, causing your debt to escalate. Your credit score will also suffer, making it harder to obtain loans or rent property in the future. 

    Soon, you’ll start receiving persistent calls and letters from the credit card company, adding stress to an already difficult situation. If left unresolved, the creditor may escalate their efforts, potentially pursuing legal action or selling the debt to a collection agency. 

    The ugly: While this is a last resort, if you continue not to pay your credit card debt your wages can get garnished, meaning the company you owe money to can withhold part of your paycheck before it even hits your bank account. (Aka, they’re going to find a way to get their money one way or another.)

    This process is less frequent since it requires a creditor to file a lawsuit and secure a court order.

Viewing 2 posts - 1 through 2 (of 2 total)
  • You must be logged in to reply to this topic.

StellarFinance, Inc. and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

Related questions

Home Forums Credit Cards Credit Reports & Scores

Viewing 15 topics - 1 through 15 (of 223 total)
Viewing 15 topics - 1 through 15 (of 223 total)
  • You must be logged in to create new topics.