Most New Port Richey area residents have at least one credit card. In fact, the average American has at least four credit cards. While most people are good about paying their credit card debt each month, occasionally an unexpected event occurs, and a person is thrown into financial turmoil. When a person is not able to pay their credit card bills, what can happen?
The first month
When a person doesn’t pay their credit card bill they will have to pay a late fee. The missed payment may also show up on their credit score.
two to three months
When a payment is more than 30 days late the account will be reported to the credit bureaus. The missed payments can appear on a person’s credit report for up to 7 years. The credit card companies will also start calling their customer to ask for payment. In addition, a credit card company will usually block the credit card owner from making any new purchases and will impose a late fee for each month of non-payment. A person’s interest rate may also go as high as 29.99%.
After four months
After several months of nonpayment, the credit card debt will be charged off and sent to a collection company. A person will be subjected to endless phone calls from the collection company trying to recoup the debt. A person’s credit score can also be ruined by having an account sent to collections. The IRS will also require a person to pay taxes on the cancelled debt.
Having credit card debt is nothing to be embarrassed about. Unexpected medical bills, a job loss, a divorce, etc. can place a person in financial distress. A legal professional who is skilled in bankruptcy can help their client understand their bankruptcy options for their credit card bill and help them get a fresh financial start.