Creditor Calls Late Payment High Interest Stop Pay Credit Cards

www.unitedfinancialrelief.com

It?s a common, yet stressful situation; you check the mail only to be confronted with the credit card bills you?ve been dreading. Regardless of how financially responsible you are, you start thinking what happens if you don?t pay credit cards? Maybe you?ve already fallen behind and you?re receiving creditor calls, or you?re in a financial hardship and know you can?t keep up for long. Maybe you?ve been paying on your debt for years without making a dent and are considering giving up. Whatever the reason, here is what happens when you don?t pay credit cards.

Late Payment Fees
Once you stop paying, you begin accruing late payment fees of approximately $25 to $35; these late payment fees are charged every month you don?t pay. To add insult to injury, the late payment fees are added to your balance and begin accumulating interest along with your principal debt.

Increased Interest Rates
Credit card companies can raise your interest rates to more than 30%. The higher interest rate can also increase your minimum payments, but because the interest is higher, most of that will now go to paying the interest fees.

Reduced Credit Limits
The creditor often reduces the credit limit down to the balance owed. This can cause any additional interest or late payment fees to push you over the credit limit, allowing them to charge an over the limit fee of $25 to $35 each month you remain over the limit.

Credit Score Impact
Your credit report starts to reflect delinquent payments in 30 day increments. Another worry is Credit Utilization, which compares your credit balances to your credit limits. The closer your balances get to the limit, the higher your Credit Utilization percentage is, and the worse your credit score is affected. If your credit limits are reduced after a late payment, your Credit Utilization could jump to 100%.

Creditor Calls
You will start receiving creditor calls requesting you to make payments. These calls will increase in frequency and become more aggressive the longer your account goes unpaid. The goal is to force you to make a payment, and sometimes their tactics are less than honorable.

Charge Off
Eventually, the creditor may charge off your debt. However, this doesn?t mean there won?t be any further attempts to collect the debt. Financially speaking, they are looking to balance the books. Instead of keeping your account in ?limbo?, they will claim your debt as a loss and receive a tax break for that loss.

Collection Agencies
At any point, the creditor may pass your debt off to a collection agency. There are four primary types of collection agencies you may have to contend with:

? Contracted: Collection companies who work for the creditor and attempt to collect the debt on their behalf; these companies receive a portion of the money collected.

? Debt Buyer: Collection companies that purchase the debt from the creditor. They buy the debt at a discount and profit when they collect the full balance owed.

? Out of State Legal (OSL): A law firm acting as a collection company. Because they are not located in your state, they don?t have any legal avenue to pursue you and are simply glorified collectors.

? In State Legal (ISL): A law firm acting as a collection company. The difference lies in the fact that they are located in the state you live in and have the ability to pursue legal action against you on behalf of the creditor.

Keep in mind, all of these companies are very aggressive and threatening in their collection tactics. They will use intimidation, threats, and even lie to scare you into paying, hoping you don?t know any better.

Legal Action:
A creditor has the right to file for a civil judgement against you. If they have any reason to believe that you can pay your debts, or if you have any assets, they will likely sue you. A civil judgement can appear on your credit report and on public records for up to 15 years. You may also be responsible for any legal fees that were accrued during this process.

Garnishment and Property Liens
After a civil judgement, the creditor can pursue wage garnishment or a property lien. If the judge approves garnishment, depending on your state, they can garnish roughly 25% of your income. They can also pursue putting a lien on your property. Regardless, you must adhere to whatever judgement the court decides upon.

If you?re struggling with credit card debt, talk to someone who can explain the different options available to you. Take control of your situation and contact United Financial Relief today by calling 1-888-534-5010 or visiting them online at www.unitedfinancialrelief.com.

Source: http://www.nationalnewstoday.com/money-and-investing/what-happens-if-you-dont-pay-credit-cards-cant-stop-creditor-calls-late-payment-fee-high-interest.php

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