Most Frankfort area residents have at least one credit card. In fact, it is estimated that the average American has 4 credit cards. Most of the time a person can manage their credit card bills but sometimes the unexpected happens. A person may have a medical emergency and now be facing thousands of dollars in unexpected expenses. Or they may have lost their job and are no longer able to pay their bills. Whatever the reason, credit card debt can be tough to deal with and a person may even face creditor harassment. So, what happens if a person no longer pays their credit card?
The first month
Missing one credit card payment will result in a late fee. A person’s credit report may also be affected by a note that a payment was missed.
Two to three months of nonpayment
When more than one month of payments has been missed, a credit card company will impose a late fee for each month of missed payments. They will also turn off the credit card for any future purchases. The missed payments will also be reported to the credit bureaus and can remain on a person’s credit report for up to 7 years. The interest rate may also go up to 29.99%.
4 months or more
By this time a person will be receiving frequent creditor harassment calls. A credit card company will also write off the owed amount to a collection company who will then try and recover the money owed. A person will then have to deal with the collection company who will be relentless with phone calls. A person’s credit score will be a disaster and the IRS will also require a person to pay taxes on the canceled debt.
Contact an attorney
Someone who is facing credit card debt may want to speak with an attorney who specializes in bankruptcy. An attorney understands that their client is facing a financial crisis and will help give them options to make a fresh financial start.