What Happens If I Don’t Pay My Credit Card Bill

Some times I wonder, what is worst thing that can happen to me, If I do not pay my credit card bills. I can not make regular payments as I have to keep up with increased house payments.

Earlier, I did write in detail about what would possibly happen if you do not pay your credit card bills.  I am still of the opinion that mortgage payment should be first priority. It is better to pay mortgage than paying the rent.

Dont pay credit card bills

If you recall that article, I said following things will happen is same order.

  1. Collection Calls
  2. Credit Card Cancellation
  3. Collection Agents on your Door
  4. Increased Interest Rates
  5. Bad Credit Score
  6. Legal Action
  7. Bankruptcy

By the way, If you don’t care much about your credit scores (due to current crisis they are worthless anyway), you should consider re-negotiating with your creditor. people have been able to get up to 50% weaver on their balances. Take a look at some of the articles below to find more credit related facts and advice.

27 thoughts on “What Happens If I Don’t Pay My Credit Card Bill”

  1. With bankruptcy it depends on what is there, after the feds and state get paid, and proportionally distributed by amount owed to each creditor.

    Ignore the phone calls for about a year, gather up about half owed, call the collection agency and tell them this is all you got, and it’s all you are going to get to settle this account. They may bicker 100 bucks one way or the other. If you don’t like it hang up, and call back in a month, and do it over. Hell I have had them even send me unsolicited offers that reflect the above scenario.

    I used to run a collections department for 8 years, we had over 20,000 accounts, with local districts, HMO’s, Veteran’s Affairs and private citizens, guess how many people worked there? 4. The stress of legitimizing an amount is not worth the payoff because that debt is really purchased for maybe forty cents on the dollar, at most. Sometimes they use a fee based collection system where a flat fee is taken for each account to see it through litigation beginning to end. Those are usually just as willing to deal before it goes to court.

    Another method is setting up a payment plan, or just start sending them small amounts every month in order to keep out of court.

    Here’s a great letter for responding to collection agencies, making them legally put EVERY thing in line is a great way to get them to drop the debt all together. I prefer this when I feel like I am getting screwed. Either way.

    Today’s Date

    Your Name Your Address

    Collector’s Name Collector’s Address

    Dear {insert name of collector or company},

    I am writing in response to your (letter or phone call) dated {insert date}, (copy enclosed) because I do not believe I owe what you say I owe.

    This is the first I’ve heard from you, or any other company on this matter therefore, in accordance with the Fair Debt Collection Practices Act, Section 809(b): Validating Debts:

    (b) If the consumer notifies the debt collector in writing within the thirty-day period described in subsection (a) that the debt, or any portion thereof, is disputed, or that the consumer requests the name and address of the original creditor, the debt collector shall cease collection of the debt, or any disputed portion thereof, until the debt collector obtains verification of the debt or any copy of a judgment, or the name and address of the original creditor, and a copy of such verification or judgment, or name and address of the original creditor, is mailed to the consumer by the debt collector.

    I respectfully request that you provide me with the following information: (1) the amount of the debt; (2) the name of the creditor to whom the debt is owed; (3) Provide a verification or copy of any judgment (if applicable); (4) Proof that you are licensed to collect debts in (insert name of your state)

    Be advised that I am fully aware of my rights under the Fair Debt Collection Practices Act and the Fair Credit Reporting Act. For instance, I know that: (a) because I have disputed this debt in writing within 30 days of receipt of your dunning notice, you must obtain verification of the debt or a copy of the judgment against me and mail these items to me at your expense; (b) you cannot add interest or fees except those allowed by the original contract or state law. (c) you do not have to respond to this dispute but if you do, any attempt to collect this debt without validating it, violates the FDCPA;

    Also be advised that I am keeping very accurate records of all correspondence from you and your company including recording all phone calls and I will not hesitate to report violations of the law to my State Attorney General, the Federal Trade Commission and the Better Business Bureau.

    I have disputed this debt; therefore, until validated you know your information concerning this debt is inaccurate. Thus, if you have already reported this debt to any credit-reporting agency (CRA) or Credit Bureau (CB) then, you must immediately inform them of my dispute with this debt. Reporting information that you know to be inaccurate or failing to report information correctly violates the Fair Credit Reporting Act § 1681s-2. Should you pursue a judgment without validating this debt, I will inform the judge and request the case be dismissed based on your failure to comply with the FDCPA.

    Finally, if you do not own this debt, I demand that you immediately send a copy of this dispute letter to the original creditor so they are also aware of my dispute with this debt.

    Signature here Your Printed Name

  2. Bent Slightly wrote more in Reddit Comments:
    “Just play it safe, but at the same time, don’t be afraid of going to court. Usually if you are straight with them and don’t lie (or I should say, get tripped up lying), it will go fairly. It’s sad to say that usually the collection negotiation is where I find most justice.

    Example: Guitar Center gave me credit for like $3000 bucks, no payments for a year. I bought about 1500 bucks worth of stuff, most of it was crap and broke in six months. When it came to pay I said “fuck you”, and ignored it. When i finally dealt with them, I offered them $700.00 dollars, and stated that most of that stuff was crap that broke within three months. She didn’t skip a beat and said yes. Then said that they hear that complaint so often that they don’t even argue with the offer. I could have offered less!!! Haha

    But personally it has been a goal in my life to live debt free other than my mortgage. Personally, I could care less about my credit rating. If you are concerned about such a rating. I would play it safe, but you don’t need to kill yourself to pay someone back. Send them 20 dollars a month. But don’t ever give anyone direct access to your account info.

    MOST IMPORTANTLY When you make the deal write the persons name down if they say “sheila” or something like that, ask for an additional employee identification number.

    They get a lot of death threats, and often do not provide full disclosure, and this can be a point where they will try a double cross.”

  3. i have lost my job and owe over 40.000 in credit card debt what is going to happen to me if i can not in any way repay this. will i go to jail. my circumstances are that i am now totally disabled and will probably never be able to work again. and will never be able to pay this debt

  4. i own like $8.000 plus two houses and a car… i was doing my resident ship and everything was fine but now immigration said that i was married just for my papers and that is not true so i stop paying my bills i can’t even work in USA any more until this is clear.. so what i did was send letter to all debts telling to charge the ins (immigration) because they don;t allow me to work here any more… jajaja I’m cool i don’t need a work any more i have good saving and off course the money is in my country already.. and i love this country honestly god bless America but i was a good citizen i went to college i was in the university and i am not one of those crappy Mexicans but hey this country sucks when they choose who they want to live here and who they not.

  5. I am going to lose my job soon.. and I have about 9000 in debts.. do let you hold payments till you get a job?

  6. I am going to lose my job soon.. and I have about 9000 in debts.. do they let you hold payments till you get a job? does anybody have any suggestions??

  7. It was the banks fault and the banks should pay!

    After watching my family’s net worth tumble, through no fault of our own, I stopped paying my credit cards last November. Just recently I was able to settle with the first company for about 60 cents on the dollar. I’m sure the rest will follow, since they are in worse shape than I.

    Sure, I’ve hurt my credit score but frankly I am not concerned. I have a mortgage, with a decent rate, that I will continue to pay. And I own my cars outright. (Anyone that would take out a loan on a new car AFTER LAST FALL is asking for trouble, IMO – especially from GM. Save your money!) No one is certain the banks will ever lend freely again, and who needs them? Last fall, we all came dangerously close to watching our Wal-Marts become trading posts. The system collapsed, and if it wasn’t for the government throwing money at the banks a Mad Max-type economy might have replaced capitalism. And who knows, it still could since no one is sure the “bad bank” solution will work.

    No matter what, don’t let the banks bully you. At this point, they need us MORE than we need them.

  8. I did the same as the fellow before me, but i didn’t wait for it to get into collections. I refused to pay for just under 3 months, until they settled with me. They gave me ZERO percent interest until i pay off the entire balance, which essentially cut my bill in half.

    They just wanted their initial investment back i suppose. I stopped paying because they raised my interest rate from 9 to 19 for NO reason. Its just a game of chicken, and if you aren’t worried about damaging your credit a little bit (who cares its worthless now anyway) then do the same.

  9. I owe $7000 plus on two cards and it’s been a year since my last payment. They call me and I ignore . I have some financial problems that’s why I can’t pay . I asked the collector to reschedule my dept and let me pay the amount that I can pay but they are not responding to my request and asking me amount that I can never pay. I am afraid of what would happen if i continue ignoring their calls and letters.
    Can any one tell me what I can do and Can they drag me to police / courts / trials / .. etc.

  10. I don’t have a social security number because I’m an international student who has lived in the U.S. for the past 15 years. I have never asked the government or anybody for help! Used to run my own small business, but the economy has gotten to me! I can’t pay my credit cards anymore, but I can’t file for bankruptcy either since I don’t have a SS#. What can i do? How can I get in trouble?

  11. i have numurious c.c. debt right now i am paying little by little,but end of month i don’t get anything leftover for my saving so what should i do?

  12. I have been thru bankruptcy before a foreclosure got a new house sold that one I have new 30000 debt in credit cards, that I not going to pay, who cares , you can walk away and get new ones in like 3 years , never pay them back.

  13. manny desai, save your self stop pay the rat basters. they took all americans with large bail outs ( your money)( your childrens, childrens money) the biggest in the history of the of nations. if not the world.

  14. I have 4 different cards…each one has anywhere from 1000CND to 6000CND owing. I am out of the country…been paying the monthly payments for 9 years….not getting anywhere…I am now in the position that I just can’t afford to pay them anymore…I need to know if I stop all together…can I go to jail if I enter the country again? I mean I really don’t care about the credit rating…I don’t want another card again…and I will never own my own house..so just need to know if they will bother to come after me for such a small amount (when you look at what others owe)..I don’t have any cars, houses, or anything that could be used as collateral…does anyone know?

    Need to fix this ASAP!!!

  15. Hello I owe chase 24000 dollars because they bumped my interest rate to 29.99 after one two day late payment. it was 3.99 then 7.99 …..if I dont pay what happens in the end?

  16. sir
    i have taken a personal loan which is iam not paying from two years now iam not in a position to pay the loan , but the bankers are saying that they have issued a warrent , so kindly suggest me the way to be safe from warrent or how should i escape from this problem
    pls any one help me out frds

  17. Hi, and I guess I am not the only one rowing the canoe over the cliff of credit card hell. After reading so many posts on different blogs I found yours to be very helpful. (Bent Slightly) has the right approach and make them work for their money. I am in debt to the sum of $30,000 and find it hard to make any payments due to the economy and work is slow……..

    The only advice I can give is to not avoid them as court will appear in your future. The collection agencies will take you to court and Its best to offer what you can and if they refuse, document all of your info and let the Judge know you at least made the effort to try and repay to your best abilities. I have heard that Judges will throw the debt out of court because you had at least tried to repay and they were being unreasonable because of your limitations to repay larger amounts. Even if its $10.00 you are showing some type of ability to pay it.( $ 15.00 to 20.00 would be better) but if this is all you can afford then it shows your effort.

    Thanks for reading this and I have bookmarked your site for future reference.

    Barry

  18. Diego garcia NO SUCH THING as a good illegal immigrant. what would mexico do to an america who wasn’t there legally?

  19. I am retired on a small soc sec income and some self-employment. We have depended on my wife’s part-time work to pay our cc, which we have been doing. Now, she cannot work and must file for disability. We have about $30,000 cc debt. What will happen if we don’t pay anymore? I read the article on this page and it didn’t say anything about that that I could find. Thanks.

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