Your Monthly Credit Card Debt Payments; What Happens If You Cannot Make Them?
Are you anxious about the prospect of not being able to pay that credit card debt?
Are you getting behind in your credit card debt payments? Have you incurred late-payment penalty fees, higher interest rates, and increased monthly minimum payment amounts?
Like others in that situation, have you started thinking about bankruptcy?
Your financial problems may be the result of a job loss, a catastrophic illness, a death in the family, a failed business venture, or just the simple mismanagement of finances. Whatever the cause of your credit card debt problems, you can avoid despair and worse case thinking about court action or bankruptcy with some primary education about unsecured credit card debt.
According to the Credit Card Debt Survival Guide, it is important to understand the realities of credit card debt collection. If your account is in arrears, it is one of millions of accounts in arrears. In the last 12 months, eight percent of American adults (18 million people) have been late making a credit card payment and have missed a payment entirely, according to creditcards.com. If you account is sold to a junk debt buyer, it is one of tens of thousands or hundreds of thousands sold in a package of junk debt for ten cents on the dollar or less.
The Federal Reserve requires the credit card companies to budget for bad debt. They assume those bad-debt consumers cannot pay for any number of reasons, and sell the credit card accounts after they write them off. Credit card debt collectors who end up with those credit card accounts view consumers in one of two ways, according to the Credit Card Debt Survival Guide; there are those who resist their collection efforts and those who do not resist them.
There are millions of charged off credit card accounts and each is only worth pennies per dollar. If you cannot afford to pay your credit card debt, your safety and security are in those numbers. If you challenge a debt collector properly, they will simply move onto the majority of delinquent account holders ready to surrender. Debt collection agencies and attorneys can be very profitable, if they only collect on 50 percent of assigned or purchased accounts.
A command of the Fair Debt Collection Practices Act, your state’s consumer protection laws and, if needed, your local court’s rules of civil procedure will make it possible to turn away debt collectors.
Tags: Catastrophic Illness, Mismanagement, Minimum Payment, Arrears