Having financial freedom can be considered a dream for many Americans. In many people's mind, becoming debt free seems to be an impossible mission especially during economy crisis. When they have accumulated a big sum of credit card debt, they choose to ignore it because they have no confidence to repay their debt in full.
If you intend to do the same, I would like to "warn" you to change your mind. Although failure to pay off your debt can't land you in jail, there are many possible consequences you have to face.
First thing first, when you have late payments, it is for sure that you can't avoid yourself from high late fee charges. The longer you drag your payment, the more fees you will accumulate.
Once your past due is more than 30 days, your lender has the right to report your late payment to all the major credit reporting agencies. In other words, whenever you miss your payment, your credit rating is affected. This damaging entry will stay on your credit file for 7 years.
When you continue not paying your credit card bills, your creditor will definitely start the collection action. You will receive reminder letters and phone calls from time to time to remind you to make payment as soon as possible. The creditor normally starts making phone calls in courteous manner. If there is no action from you, the creditor probably sells off your account to debt collection agent. The collection agent normally uses harsh tactics to collect the debts. Are you prepared to face these?
Once your debt is 6 months old, your card provider has the right to cancel your card and file a lawsuit to demand for payment. When you are being sued, you will be asked to attend to the court to defend yourself. If you fail to settle your debt with your creditor and the creditor wins the lawsuit, you will be granted a judgment. You need to pay your debt in full. At the same time, it is compulsory for you to pay the court fee. Again, your credit rating will be badly affected.
No matter how tough your life is, you need to face it with courage. You are reminded to be responsible for what you have done. There is no short cut for you to erase your debt. Since you are the one who swipe the card, you should find ways to get rid of the outstanding in a proper manner.
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