The initial impact of defaulting on a credit card is late payment fees and interest rate hikes. Late fees will continue to grow and will be applied to your balance as long as the account is open. The late fees combined with higher interest rates results in soaring monthly payments and further debt. Unfortunately, individuals who were unable to make the minimum payment due before defaulting find themselves in a worse financial situation after the fact. As of February 22, 2010, your interest rate will only go up if you are more than 60 days late on your payment.
If you’re only a few days or weeks late, the creditor will try to contact you by phone and possibly by mail. If you are unable to make payments, or a payment plan cannot be reached within a reasonable amount of time (usually three to six months), the creditor will refer the account to an outside debt collection agency and close the account. A debt collection agency will try to get as much of the debt owed and may work out a payment plan with you.
Late or delinquent
credit card payment harassment have one of the most detrimental effects on your credit score. If your credit score drops dramatically, other lenders may increase your interest rate or decrease your available credit. Additionally, being approved for further credit may be more difficult.
If your account is seriously delinquent or you cannot work out a payment plan with your creditors, the credit card company harassment or a collection agency may bring a lawsuit against you. If a judgment is brought against you in court, your wages may be garnished or a property lien may be ordered.
You will be moved from the frying pan to fire when the collection agency will begin haunting you like hounds. The situation becomes worse when you fall prey to their unfair debt collection practices. They will trouble you making credit card harassment calls now and then. They are very likely to publicize your defaulted loan status that will in turn, make you suffer disgrace on your social reputation and feel embarrassed among your neighbors, friends and relatives. Sometimes, their approaches for debt collection go far to be abusive and offensive. The collector not only violates the Fair Debt Collection Practices Act but also your consumer rights to be treated fairly. Contact us and we will protect you by means of legal support from the embarrassment and harassment in the hands of the debt collector.