If I can’t pay credit cards, what happens?

A lot of people have trouble with, and can’t pay credit cards. What happens next? Any major life changing event like a job loss will make the problem even bigger. You can rest assured if you happen to be in this position, that you are not alone. The US has seen nearly a doubling of people that have lost their jobs in some way in the last few years. Credit card issuers have realized this trend and have been helpful in coming forth with different types of assistance for those that can’t pay credit cards anymore. You may very well want to look into some of these programs as your monetary future could be shaped by what you do now.

When you sign up for a credit card, you sign an agreement that determines things such as the time frame you have before a due payment is considered late. Always, always, always get a hold of your credit card company as soon as you know you are going to have a late payment. Your account will most likely be considered delinquent if it is more than thirty days past due, and will be reported as such to credit agencies.

But you may be able to work out something with your creditor if you contact them. They may be willing to lower your interest rate, or perhaps waive fees. If you get in too deep, a debt consolidation or debt settlement company may be able to negotiate with your creditors on your behalf to lower payments.  Food shelves and other charities offer help and free food to persons that have a need. This may help you to channel more cash into paying off credit cards.

Again, it’s always a good idea to call your creditor and see what you can work out. They have been getting more flexible as the economy has been sinking. You can put forth an idea too. See is they would be agreeable to lowering your payment for a short term until you get back on your feet, then resume with regular payments after that.

Keep in mind that your creditor has the right to turn your debt over to a collection agency in the event you don’t communicate with them and set up a repayment plan. Finally, creditors can sue you for money owed, and win judgments allowing them to garnish your wages, or put liens on your property.

Best thing to do is to work out a payment plan, stick religiously to it, and be very careful with future spending to not land in this position again in the future. If you can’t pay credit cards, what happens next is very much up to you, and how you deal with your creditors.