Unpaid credit card debt – What is the big deal about it?
Problem
I have defaulted on my Chase credit card. I owe around $47,500 on the card. I am getting calls and letters from Chase every week. Frankly speaking, I am not bothered about this debt. I don’t have any intention to pay off this card. But my parents don’t share the same sentiment. They keep telling me to clear my dues. I just don’t understand their logic. I have defaulted on only 1 credit card. I don’t have enough money to pay it off. So, what’s the big deal about it? I am still leading a perfectly normal life.
Solution
Your parents are right. You should pay off the Chase credit card as early as possible. An unpaid credit card debt can harm you in myriads of ways. Let us know what can possibly happen if you don’t repay the Chase credit card.
First of all, your credit score will get a hit due to the non-repayment of the debt. It is said that a single late payment can drop your credit score by 60-100 points. The damage will be severe if your credit score was high prior to the loan default. For instance, if your credit score was 760, the late payment could hurt your score by around 90 points.
You may argue that you are not bothered about your credit score. But there are lots of people in the country who give a great importance to credit scores. It may be helpful for you to know that credit score plays a vital role in individuals’ financial life. You won’t be able to obtain a mortgage loan without a decent credit score. The insurance companies will hike the premium rates for you. This means that you’ll be paying much more than the others for the same amount of coverage. Other than that, it may become difficult for you to get a job in future.
The credit card company is now calling you time and again for repayment of the bill. However, they can lose their patience very soon. They are most likely to wait for 6 months or so. Thereafter, they may assign your account to a collection agency.
The debt collectors are pretty aggressive people. They will haunt you until the debt is paid off. They may even call you at work and harass your employers. If you still don’t pay the money, they will register a case against you.
It is clear from your query that the debt is genuine. So, there is a great chance that the debt collector will win the case and obtain a judgment against you. Thereafter, the collector will garnish your paycheck till the debt is repaid. The collector may also impose a lien on your property. But that will depend upon your state laws.
Finally, I feel that you should stop ignoring the creditor calls. You should try to arrange a payment plan with the credit card company. If you are not able to strike a deal with the card company, then you can take advantage of debt consolidation program and repay the bill.
Jason Holmes is a regular writer with Debt Consolidation Care and is also a contributory writer with other financial sites. His expertise is woven around various aspects of the debt industry and with his e-books he tries to impart to people the different situations and simple solutions to get out of difficult situations. Some of his works include e-books like ‘Credit Score The Quintessential Therapy for a Happy Pocket’, Take Creditors and Collection Agencies to Small Claims Court’ and, My Story- From Depression To a Smile’.
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