- Penalty king Kane sends Bayern past Gladbach
- Man City hit Salford for eight, Liverpool cruise into FA Cup 4th round
- French far-right firebrand Le Pen's buried in private ceremony
- Draw specialists Juve held by derby rivals Torino
- Rockets-Hawks game postponed due to winter storm
- Blue Origin set for first launch of giant New Glenn rocket
- Toulouse, 11-try Bordeaux-Begles into Champions Cup last 16
- Dutch police detain hundreds at climate protest
- Lyon slip to Ligue 1 loss at Brest
- Toulouse edge Sharks, Bordeaux-Begles hammer Exeter to reach Champions Cup last 16
- Liverpool, Chelsea cruise into FA Cup 4th round, Brentford stung by Plymouth
- Benin's women, pillars of voodoo celebrations
- Marmoush fires Frankfurt to victory amid Man City link
- Tram collision in France's Strasbourg injures 20
- New Red Bull football boss Klopp in stands for Paris FC match
- German far-right outlines radical programme as protesters rally
- Shami returns to India squad for England T20s after year absence
- Atalanta miss chance to top Serie A with Udinese stalemate
- Syria, Lebanon pledge firm ties after years of tensions
- De Mevius and Brabec take Dakar sixth stage honours
- Ukraine says questioning POWs it claims are North Koreans
- France hands over second army base in Chad amid withdrawal
- LA fires expand as winds forecast to pick up
- De Mevius, Brabec, take Dakar sixth stage honours
- Sudan army says enters key paramilitary-held Al-Jazira state capital
- Kvaratskhelia has asked to leave Napoli, says coach Conte
- French far-right firebrand Le Pen's funeral begins amid tight security
- Captain Alexander-Arnold leads Liverpool cruise into FA Cup 4th round
- New Red Bull football boss Klopp in stands for Paris FC game
- Noel powers to third win of season in Adelboden slalom
- Germany battles to secure stricken 'Russian shadow fleet' oil tanker
- Vonn sixth in downhill return as veteran Brignone wins in St Anton
- Indonesia's Mount Ibu erupts, spews hot lava and smoke
- Franco-Algerian influencer to stand trial in March
- Veteran Brignone claims St Anton downhill, Vonn in sixth
- Auger-Aliassime and Keys take out Adelaide titles ahead of Melbourne
- Holland ready to step out of Southgate's shadow in Japan
- Real Madrid must avoid mistakes from Clasico thrashing: Ancelotti
- Daughter says French rapist Dominique Pelicot 'should die in prison'
- Protests delay start of German far-right party's key meet
- Inoue to face Kim after Goodman pulls out with injury
- 'It's great to be back': Moyes returns as Everton manager
- China marks muted 5th anniversary of first Covid death
- 'It's great to be back': Moyes returns as boss of Everton
- Toulon flanker Ludlam set to show England what they're missing
- Keys beats Pegula to win second Adelaide title
- Thai suspect confesses to killing Cambodian ex-lawmaker
- Sri Lanka bowlers skittle New Zealand in 140-run win in third ODI
- Japan to give Indonesia high-speed patrol boats in security deal
- UK treasurer says London 'natural home' for Chinese finance
BCC | -1.31% | 115.88 | $ | |
SCS | -3.01% | 10.97 | $ | |
BCE | -2.92% | 22.96 | $ | |
NGG | -3.3% | 56.13 | $ | |
CMSC | -0.79% | 22.92 | $ | |
RBGPF | 100% | 60.49 | $ | |
RIO | 0.36% | 58.84 | $ | |
JRI | -1.16% | 12.08 | $ | |
CMSD | -0.65% | 23.25 | $ | |
GSK | -1.99% | 33.09 | $ | |
AZN | 0.64% | 67.01 | $ | |
RELX | -0.86% | 46.37 | $ | |
RYCEF | -0.42% | 7.07 | $ | |
BTI | -2.34% | 35.9 | $ | |
VOD | -1.99% | 8.05 | $ | |
BP | 0.54% | 31.29 | $ |
What Happens If I Don’t Pay My Credit Card Bill for Years?
There could be many reasons why someone might let their credit cards go unpaid for months or even years. This may result from a major financial hardship such as a job loss, divorce, or medical issue. On the other hand, it may also be due to financial negligence if the person thinks there won't be serious consequences.
Below we'll discuss what happens when credit card bills go unpaid for an extended time, and how something like a debt consolidation loan may be able to help you from falling into financial
How long before unpaid credit card debt gets charged off?
Credit card companies aren't going to wait indefinitely to be repaid. At first, when payments are missed, they will typically impose late fees and/or a penalty interest rate that's higher than your standard one. And keep in mind that interest charges will build daily on the unpaid balance due. This will cause the debt to compound and grow larger the longer the situation persists.
Eventually, the credit card company will decide that the cardholder is unlikely to pay their bill in full. This generally occurs between 90 and 180 days after the account becomes delinquent. The credit card company will "charge off" the account when this happens. This means it writes it off as bad debt, which has implications for both its balance sheets and tax purposes. Additionally, the cardholder's account will be closed and no further charges can be made.
Meanwhile, the outstanding debt does not go away. The debt may be sold to a third-party collection agency. The collection agency can then pursue repayment, hoping to profit from the unpaid debt obligations it now owns.
Collections will pursue your debt
Once a collection agency has your account, things can potentially become tense. They might file a lawsuit against you in an attempt to recoup what's owed. This could result in the following:
Garnished wages
Liens against your property
A freeze is placed on your bank accounts
Your credit score will drop
Another thing a collection agency will do is report the account to the three major credit bureaus, Transunion, Equifax, and Experian. This will appear as a major red flag on your credit report and can significantly reduce your credit score.
FICO, a company responsible for calculating credit scores, weighs payment history by as much as 35% of your score. An account being sent to collections will have a significant negative impact on your credit score.
Unfortunately, when this item appears on your credit report, it will typically stay there for seven years whether it's paid or goes unpaid. Unless the collections claim can be disputed on the grounds of an error or inaccuracy, it's unlikely that this item will be removed before then. That could significantly impact your ability to be approved for new loans or credit lines, such as a mortgage, auto loan, or credit cards.
The only way around being sent to collections is to not get into the situation in the first place. If you're experiencing payment issues with credit card or personal loan debt, you may want to consider a debt consolidation loan. This loan can be used to pay off other high-interest, unsecured loans. Debt consolidation loans typically have a lower fixed interest rate, making for a more manageable payment.
The bottom line
When credit card debt goes unpaid for an extended time, it will eventually be sent to collections. This will appear as a negative item on your credit report for the next seven years and significantly cause your credit score to drop. To avoid this, do your best not to let things get to this point by considering your options, such as a debt consolidation loan.
SPONSORED CONTENT
CONTACT:
Sonakshi Murze
Manager
[email protected]
SOURCE: OneMain Financial
O.Gutierrez--AT