Unfortunately, many people are finding that they are unable to pay their monthly credit card bills. This is not a surprise in today’s economy. Many people have lost their jobs or have high mortgage payments due to the structure of their mortgage. So, what happens if you can’t make your minimal payments toward your credit card balances? The collection efforts begin…
Usually, you will first receive a statement reflecting that you are 30 days late. You will also have a late payment penalty fee. Additionally, your interest rate will likely increase. As the months go by the fees will continue to be added and your account will be closed. The creditor will report your delinquency to the credit bureaus. The calls will also start. You will start receiving numerous calls requesting payments. These calls can be harassing at times. There are laws in place to protect debtors from these harassing calls but sadly some creditors continue to harass debtors while knowingly violating these laws.
After months of not making payments and receiving penalty fees, increased interest rates, and numerous phone calls, what happens next? Usually, this is when you will be served. Yes, the dreaded lawsuit. Creditors will either retain outside counsel or use in-house counsel. You will be served with a Complaint for breach of contract and/or account stated. In Florida, you will have 20 days to Answer the Complaint. If you do not Answer the Complaint within the 20 days, you will receive a default judgment.
What happens after the default judgment? The creditor will try to collect from you. Either by garnishing wages, placing a lien on your property, and/or freezing your bank account. So if you can’t afford your credit card payments, you should consider speaking with a professional to protect you from the consequences.