Paying credit card bills does not put food on your table, keep a roof over your head or provide you with transportation. What happens if you choose not to pay your credit card bills? The current economic situation has caused financial hardships for many. Unemployment and layoffs are increasing every day in our country. Easy credit has lead to the collapsing financial industry. Some families are facing decisions of which bills to pay. They simply do not have the finances available to pay all of their bills.
Can You Legally Stop Paying Credit Card Bills?
Legally, the only recourse the credit card company has if you refuse to pay your credit card bills is to file a civil suit against you. A judgment filed against you can result in garnishment of wages and liens. The judge may order a strict repayment plan. Filing suit against you is a last resort for a credit card company. It is expensive for them to take you to court.
You cannot go to jail for not paying your credit card bills. Most credit cards are unsecured, which means no one can take your house, vehicle, furniture or other belongings. An exception might be a credit card for a furniture company. Not paying a furniture credit card you used to purchase your home furnishings could result in repossession.
Working With Credit Card Collections
Expect to receive harassing phone calls from credit card companies if you choose to stop paying your bills. They may call your home, work and cell phone at any time of the day or night, up to 9 p.m. If you do not answer, they will begin to call your friends and relatives. Before this happens, try contacting the company to work out a payment plan. Most companies would rather have a small payment from you than no payment at all. Do not be intimidated by their threats. Tell them upfront what you can afford to pay every month and stick to it. Be very careful about any repayment agreements. Read them very thoroughly before signing and know what terms you are agreeing to before signing.
Multiple Credit Card Debt
Many people are finding themselves in the situation of having multiple credit cards with thousands of dollars of accumulated debt. If you are paying on multiple credit cards, develop a strategy. Set aside the amount of money you can afford to pay for credit card debt each month. Divide the amount by the number of credit cards, putting the largest amount towards the card with the lowest balance. Once you have paid one credit card off, dedicate the largest amount of money to the card with the next lowest balance.
Repayment Options
If you are unable to pay the minimum balance on credit cards, try to obtain a debt consolidation loan. Debt consolidation loans may be an affordable option. Paying only one credit card bill monthly can increase the money left each month for living expenses. If you are able to obtain a debt consolidation loan, you should then consult a credit counseling service. Credit counseling services will help you organize your finances and develop a personal budget. If you are unable to pay the fee for credit counseling, there are free services available.
Bankruptcy
Bankruptcy should be a last resort. You should realize that if you file Chapter 7 Bankruptcy, this could result in loss of property. Your non-secure assets will be sold to pay off some of your debt. Chapter 13 Bankruptcy is reorganization. This is allowing you time to get your finances in order and can stop garnishment of wages and repossessions. A bankruptcy can stay on your credit report up to 10 years, making it difficult to purchase a home or buy a car, and penalizing you with higher interest rates if you are able to obtain the financing.
