If you have high balances on your credit cards, you probably feel overwhelmed and not sure what to do. If you are having trouble paying even the minimum amount on your credit cards, you may have thought about defaulting on them. However, this can negatively affect your life in many ways. Here are four consequences of not paying your credit card debt:
You Will Get Charged Late Fees
Even if you just miss one credit card payment, you will get charged late fees. These fees will increase your balance even more and make it that much more difficult to pay off your credit card debt.
Your Account Will Be Sent To A Collection Agency
Once your credit card debt gets charged off, it will get sent to a collection agency. The collection agency is now in charge of collecting your debt and will send letters in the mail and call you several times a day. While some debt collectors may be polite on the phone, others may harass you and put a lot of stress in your life.
Your Credit Score Will Go Down
If you have stopped paying your credit card debt, your credit score will dramatically decrease. Having a poor credit score will make it a lot more difficult for you to get approved for loans, rent an apartment, and get affordable insurance. A less than stellar credit score can also affect your chances of getting hired for certain jobs. Many companies nowadays look at your credit score before making a hiring decision. For example, if you are applying for a mortgage loan officer position at a bank, the hiring manager may think you are irresponsible with money and not offer you the position.
You Could Get Sued
If you do not pay the collection agency the money you owe, they could file a lawsuit against you. If the judge takes the collection agency's side, they could garnish your wages to collect the money. If garnishing your wages would hurt you severely financially, you should ask the judge if there are other options.
As you can see, defaulting on your credit cards can have a big impact on your life. If you do not think you can get control of your debt, you should talk to a lawyer as soon as possible. He or she will help you determine the right debt resolution option for you based on your specific circumstances. For more information, consider contacting a professional like those at David Reynolds & Associates Debt Helpers.