What Happens If I Don’t Pay My Credit Card?

I have a credit card account that was closed because it was maxed out and i was not able to pay the minimum at the time (went on for about 5 months). Now that the account is closed, what happends next? I don’t understand the process. Can you please help me?

Wilfredo

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Hello Wilfredo,

Are you able to begin making payments again?  If so, then you may make an arrangement for the account to be re-aged or settle with the credit card company with a not-frequently-advertised hardship program. 

If you do nothing, then the credit card company will eventually (if they haven’t already) assign the account to a debt collector or sell to a junk debt buyer with which they may seek to pursue the defaulted loan balance through the court and obtain a judgment against you.  With a judgment it may be possible to garnish wages, levy a bank account, and/or attach other assets depending on state law and your circumstances.

The longer you wait, the worse it is for your credit report; but, the prospects of settling the debt for a lower percentage increase after the debt is charged off.

What happens next?  Any or all of the above.

Thanks for the questions and hope this helps.

Paul

This author is not an attorney and this information should not be considered legal advice. Please consult an attorney for legal advice.