Like other consumers, you may rely on your credit cards to pay your bills and make purchases. It is easy to simply make a payment without considering how this could affect your overall balance. You may find yourself in a position where you owe more on credit cards than you can effectively manage on your own, and you might not be able to keep up or even make the minimum payment. What will happen if you can’t pay your credit card bills?
Your inability to keep up with your credit card bills may begin to affect you in other areas of your financial life. Debt can quickly snowball, and unpaid credit card bills can lead to unpaid mortgage payments, late loan installments, medical bill accumulation and more. It is easy for credit card debt to quickly spiral out of control and have a negative impact on multiple areas of your life.
The repercussions of credit card debt
When unpaid, credit card balances will quickly grow as interest accumulates. This will begin to affect your credit score, even after the first missed payment, limiting your future opportunities as well. The repercussions you could face for unpaid credit card debt will depend on the details of your individual situation and the number of payments missed, such as:
- After the first or second missed payment, the credit card company may take away the introductory APR and charge you a late fee.
- After the third missed payment, the credit card company will charge you additional late fees, and the company may close your account.
- After three or more missed payments, you will face additional late fees and penalties, and the credit card company could file a lawsuit against you. The company may sell your account to a debt collection agency.
The damage to your credit score, accumulating interest and late fees can make your situation even more unmanageable. At this point, it may be helpful to explore the legal options available to you.
Is a better financial future possible?
It can be disheartening to face credit card debt you can no longer manage on your own. If you are drowning in this type of debt, you may benefit from exploring the option of seeking bankruptcy protection. This process allows you the chance to deal with certain types of unsecured balances, including credit cards, once and for all. Through bankruptcy, you may be able to secure a better financial future.