Most people in the Landover area have at least one credit card. According to Experian, the average American has four credit cards. This can be a problem if a person is not able to pay their credit card each month. But what really happens when a credit card goes unpaid?
The first month of not paying a credit card bill
When a person misses the due date of their credit card bill the credit card company will impose a late fee. A credit score can also be affected as a person’s on-time payment history would have a mark on it.
Two to three months
When a person goes two to three months without paying their credit card bill the penalties keep adding up. The credit card company will typically turn off the credit card, not allowing a person to make additional charges. The interest rate may go up to 29.99 percent and a credit score will be affected. The credit card company will also start making frequent phone calls.
More than four months
By this point, a credit card company will most likely charge off the debt. This means that the debt will be sent to a collection agency who will then work to recoup the money. Once this happens, a person’s credit score can be ruined. The IRS will also send out a tax form requiring a person to pay taxes on the canceled debt.
Those who are facing insurmountable credit card bills may want to speak with a legal professional who is skilled in bankruptcy. An attorney understands that their client is at a tough point at their lives and can help them understand their legal options.