What happens if i don’t Pay My Credit Card Bills: Most Read

Delaying a payment on a credit bill can create several difficulties. In the best case, you just pay late fees and higher interest rate for some time and in worst cases, credit debt leads to lawsuits, liens and garnishments. Creditors are covered by Consumer Credit Act (CCA) and there are strict rules and guidelines that they’re mandated to follow in case you fail to pay your debt.

Late Fees and Higher Interest Rates

If you haven’t paid your credit card debt for less than 6 months consecutively, you’d keep accumulating high interest and late fees on your credit debt. 

The due payment date is roughly three weeks after the statement date. Failure to pay within this time period would result in late fees and higher interest rates. Additionally, your creditor will report your failure of debt servicing to credit bureaus like Experian

The interest rate can vary depending on your creditor and how overdue you are on the payment. It can be anywhere from 8% to 36%. Measures like late fees and higher interest rates are designed to discourage you from missing out on payments but while they’re effective as proactive deterrence, they only add to the difficulty of paying back debt if someone can’t pay their debt in the first place. 

Consecutive failures to pay your credit debt will keep accumulating your account late fees and even higher interest. During this time, you’ll be contacted by your creditor to ask you to make the due payment. 

How Long It Takes to Default on Credit Card Debt?

Credit card account default usually takes 6 months of failure to pay. After your credit account default, it’ll be shut down and your credit line will be canceled. That’s what opens the door to worse outcomes. 

After your account is shut down, your creditor will report your default to credit bureaus and is most likely to sell your debt to debt collection agencies at pennies on the dollar rate. The debt collectors profit from recovering the face-value of the debt they bought and they have the means and resources to recover the debt legally

Debt collectors can get a legal garnishment judgment against your income or bank account. If you live in a state where garnishment of wages or bank account is prohibited by law or if your income goes to an offshore bank account or an account that cannot be garnished, the collectors could try and get a lien on your home equity. Whatever legal action they take, they have to take it within the Statute of Limitations period by state for credit default.

How to Get Out of Credit Card Debt?

If you’re struggling with your finances but also want to get rid of credit card debt, there’s several options depending on your situation. 

Debt Settlement

If you can’t pay your debt in full but can pay some of it then debt settlement is your best shot. Basically, you negotiate with your creditor to give you relief in part of your credit card debt. 

This might sound counterintuitive but it works. Credit card debt is unsecured so there’s no collateral that your creditor can lay a claim upon. Their best shot is recovery of some part of the debt. Therefore, they’re most likely to sell your debt to a collection agency at a rate that is massively cheaper than the debt’s face-value after they realize you don’t intend to pay it back after 6 months.

If you can pay more than what your creditor would get from selling your debt to a debt collector you’re likely to convince your credit issuer if you negotiate properly. Typically, you’d end up paying 40-60% of your debt and get all of it written off your credit report. How much you have to pay would ultimately come down to two factors: How much the creditors gain from selling your debt and how well you negotiate. 

Nothing prevents you from negotiating yourself. However, It is recommended that you hire a professional negotiation agency to get your debt settled. 


Bankruptcy is highly undesirable because your credit score takes a rock-bottom hit but it might be the only real option if you can’t pay your debt and are being hounded by debt collectors who are coming after your wages, bank account or home equity. 

There’s two types of bankruptcies that are most important when it comes to debt in general. These are chapter-7 and chapter-13

  • Chapter-7 Bankruptcy 

You can file for chapter-7 bankruptcy if you can’t pay your debt at all. Filing for a chapter-7 will discharge all kinds of unsecured debts, excluding child support, alimony and federal loans etc. So this is one way to get rid of credit card debt. Bear in mind however, that your credit score will take a lasting hit and you’ll have to start building credit from scratch, possibly with a secured credit card.

  • Chapter-13 Bankruptcy 

You can file for a chapter-13 bankruptcy if you can pay your debt but want its installments spread across an extended period of time. In chapter-13, you can pay your unsecured debt over a period of three to five years. Any amount due after the term limit is completed, will be discharged. 

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Habib Ur Rehman
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