When you decide to completely stop all your credit card payments, your financial obligations do not cease to exist. Truth of the matter is, your creditors will do exactly the opposite. You will start to feel their presence more and more as you default deeper into your outstanding accounts.
The government can only protect you with regards to the manner by which the creditors and debt collectors force you to pay your debts. This is enforced through the FDCPA or the Fair Debt Credit Practices Act. However, they cannot protect you from the consequences of not paying your debts. Settling your debts remain to be your responsibility.
What Happens When You Stop Paying Credit Card Debt
Your Debt Increases. Ignorance is not necessarily blissful when applied to your debts. Even as you make the conscious effort to ignore it, your debts will continue to increase as the penalty fees and interest rates continue to rise. Every month, the interest and fees will add to your premium and the total amount that you did not pay for the previous month will be the basis for the interest of the next billing statement.
Collections will be more Consistent. When you reach a specific time frame of not paying your cards, the creditor will pass on your debt to a collection agency. Once this happens, you will begin to feel the stress of your mounting debt. They will call, mail and text you to convince you to resume paying your credit cards. You can expect up to 20 phone calls a day from debt collectors.
Negative Impact on your Credit. When your debt is passed on to a collector, that in itself is a huge impact on your credit score. When it turns into a lawsuit, that is another impact. The late payments are noted on your credit report when you reach the 30 day milestone. The same is true for every month that you stop paying your credit card debt. After 6 months of not paying, your debt will be considered as “charged-off”. This permits the credit card company to use your unpaid balance to get tax deductions. While that is beneficial to your creditor, that places serious mark on your credit report – which will stay there for the next seven years. That will make any future plans of getting financial help very difficult.
Eventually, after all efforts are exhausted and you still refuse to pay your debts, the collector will be forced to file a lawsuit against you in some cases. If it pushes through and the courts rule in their favor, you may be forced to file for bankruptcy. At the same time, your creditors and collectors are allowed to seize your assets to compensate for the debt that you cannot pay. If you live in a wage garnishment state, your wages could be garnished by your creditors.
What to do When Unable to Pay for Credit Card Debt
One of the worst ways to deal with credit card debt is not paying for it. If you find yourself having financial difficulties and you are unable to pay for your obligations anymore, get the help of a debt relief company.
National Debt Relief will help you solve your credit woes by assigning a debt professional to view your financial situation. Together, you will come up with a debt management plan that will help them represent you and negotiate with your creditor. The goal will be to lower your balance based on how much you can afford.
You will be asked by the debt professional to stop sending payments to the creditor. Instead, you will be saving that amount to grow a settlement fund. This fund will be used as the negotiation tool that will convince your creditor to waive the penalty fees, interest rates and forgive a certain percentage of your balance.
While enlisting the help of a debt relief company will reflect on your credit report, it will not be as damaging as other alternatives – like filing for bankruptcy, for instance. Also, this is one of the best and legitimate ways of getting on the road towards a debt free life.
Give us a call and we will sit down with you to discuss your unique financial situation. You can also fill out the application form on this page and someone from our team of debt professionals will contact you as soon as possible.