What If You Don’t Pay Credit Card Debts?

What if you don’t pay your credit card debts? Will it incriminate you as a criminal to serve a jail term? There are a lot of such questions which might fret you a lot. But don’t worry. Here are the answers that may possibly lend you great help in this respect.

What If The Credit Card Debts Are Not Paid?

If you have defaulted on credit card, your bank will flag you as delinquent card member. Usually the bank issues a reminder notice to such member to pay off the debt as soon as possible.
If you continue with non-payment even though receiving so many persistent reminders from your bank, it will then turn over your account to a collection agency (an intermediary business partner that buys defaulter’s account). 

The collection agency will try to persuade you to pay off the debts. The collection amount is usually considered “profit” for such agencies as they get commission on the recovered debts.

Why Banks Sell Defaulter’s Account To Collection Agency?

To minimize the loss and avoid costs (legal and otherwise), the banks resort to collection agency and sell them defaulter’s accounts. Moreover, the banks are not legally privileged to intrude defaulter’s savings account to pay for the debts. A formal declaration from the court of law is essential to do that. This will cost banks a fortune. As a result they have to take over the account to collection agency to avoid such hassles.

What If Collective Agency Buys Your Account?

As we discussed before, when collective agency buys your delinquent account, it will try to convince you pay back the debts.

There are also some horror stories claiming that collection agencies used threats and menacing advances against the defaulters to recover debts. But they are just rumors and so will cause you no harms at all. Better stay calm and don’t get scared. 

Possibility Of Jail Term?

Frankly speaking, nobody, who defaulted on payment of credit card debts, ever served jail terms. This is because incurring debt is not termed “criminal offence” under any legal act or statutory section. It is basically assumed that you are not able to pay off your debts because of certain reasons.
However, if you have signed a contract or issued a cheque which failed or bounced, you will then be incriminated as Estafa according to the law under such circumstances. That’s why; the collection agency will try all possible ways to persuade you sign up a payment agreement or issue cheque to disburse the debts. In case the cheque is bounced or the agreement is breached, the collection agency will have legal right to sue you in the court of law for non-repayment of the debts.

What About Credit History?

No doubt, long term default on payment of the credit card debts will damage your credit history. In turn, it will be very difficult to take fresh loan from a bank in future. If you are planning to buy a new house or a car in future, better forget borrowing loan from a bank and start saving money on your own. 

In conclusion, there are ways to resolve outstanding debts on credit card. Have patience and consider options that can help you sort out this issue. Share your concern with family members or friends to get some supportive ideas. You can also go for a financial planner that will help you fix this problem.
 

Being defaulted on credit card debt is certainly a great dilemma to get rid of. However, there are many suggestive ideas and resources that one can use to solve this issue. Most persons don’t pay off credit card debts because of certain reasons. So better you should solve this problem by using your resources than worrying for it.