When someone is experiencing financial hardship, credit card payments are often the first thing to be sacrificed.
There is no arguing that paying for housing, transportation, and food is most important, but some people mistakenly think that the credit card companies have no recourse for non-payment other than just reporting the delinquent payment history to your credit report.
The Consequences of Unpaid Credit Card Debt
It can come as a big surprise that credit card companies can not only sue you for not paying, but can also take forcible collection action against you if you do not do something to stop the lawsuit. It is so common for people to ignore the fact that they are being sued by a credit card company that courts will not even hold a hearing unless you let the court know that you are going to defend yourself. If you do not participate in the lawsuit, the creditor will get a judgment against you automatically.
Once a creditor has a judgment, the creditor can take steps to force you to pay up. If you own a house, that judgment could be a lien against your house, which means that if you attempt to sell the house or refinance the mortgage someday, you will have to pay the creditor before you can do that. The creditor can schedule a sheriff’s sale of personal property. A sheriff’s deputy will come to your house, take an inventory of everything you own and will come back in a month or so to sell your things. Lastly, a creditor can freeze your bank account once they have a judgment against you. You will not be given any advance warning of this and you will only be able to access $300. The rest of the money in the account will be taken by the creditor after two weeks.
Are You in Over Your Head in Credit Card Debt?
Credit card debt is serious and not paying your debt has serious consequences. If you find yourself unable to pay your debt, do not ignore the problem. Filing bankruptcy may be the right way for you to eliminate or restructure your debt to prevent things like a frozen bank account or sale of your personal property. Contact Steidl & Steinberg for a free consultation to see if bankruptcy is right for you.