Almost every Louisville resident has at least one credit card. In fact, it is estimated that each American has at least 4 credit cards. The balances on these credit cards can get out of control quickly, especially if a person has an unexpected financial event. An accident, a job loss, or any other unexpected circumstance can leave a person wondering how they will be able to pay their bills. There are several serious consequences that can arise if a person does not pay their credit card bill.
Missing one payment
If a person is even one day late on their credit card payment the credit card company will impose a late fee. Their credit card interest rate may also go up. A person’s credit score may also drop for missing a payment.
More than one missed payment
If a person has not paid their credit card bill in 2 to 3 months the account will be reported to the credit bureaus. The credit card company will block their customer from making any future purchases. They will also rack up more late fees. If the account is more than 60 days past due the interest rate may go up to 29.99 percent.
More than 120 days past due
When a person hasn’t made a credit card payment in 4 months or more the credit card company will charge off the balance. A collections company will take over the balance due and the credit card company will no longer negotiate with their customer. The collections company will frequently call the customer and their credit score will go down significantly. The IRS will also require the person to pay taxes on the debt.
Contact an attorney
Those who are facing insurmountable credit card bills may want to speak with an attorney who specializes in bankruptcy. An attorney understands their client is going through a rough time and can advise their client on whether bankruptcy may be the fresh start they need.