Almost every Houston area resident has at least one credit card. In fact, the national average is that Americans have at least 4 credit cards in their possession. Although we all try to pay off our credit card debt each week there are situations in which life happens and we can’t pay all our bills each month. A person can have unexpected medical bills, be laid off from their job, be unable to work, etc. If a person is no longer able to pay their credit card bills, they may wonder what can happen.
The first month
If a person misses a credit card payment, they will receive a late fee. The missed payment may also affect their credit score.
Two to three months of missed payments
If a credit card payment is more than 30 days late the credit card holder will be reported to the credit bureaus. The missed payments can remain on a person’s credit score for up to 7 years. In addition, each month will rack up additional late fees. The card issuer will also usually block the consumer from making any additional purchases and the interest rate may increase up to 29.99%. This is when a person will also start receiving annoying phone calls from their credit card company.
Four months or more
After not paying a credit card bill for several months the balance will be charged off by the credit card company. This means that the balance is sent to a collection company. A person’s credit score can be ruined, and it can be impossible for a person to get more credit for at least 7 years. In addition, a person will need to pay taxes on the canceled debt.
A legal professional who is skilled in bankruptcy can help their client when they are falling behind on their bills. They understand how the debt process works and can help their client get back on their feet. They can review the bankruptcy options that can help and make sure their client is able to start fresh.