Many Miami area residents have been hit hard by the Covid-19 pandemic. Retail workers, restaurant workers, hotel workers, etc. have all had their hours cut or their jobs lost altogether. There are many reasons why a person may no longer be able to pay their credit card bills. If a person is facing mounting credit card bills without a way to pay them, they may want to know what happens if the bill goes unpaid.
First month of nonpayment
When a person misses a credit card payment the credit card company will charge a late fee. The missed payment may also show up on a person’s credit report.
Two to three months of nonpayment
When a person misses more than one month of a credit card bill there are increasing consequences. The account will be reported to the credit bureaus and each month will bring an additional late fee. The credit card company will also block a person from making any new charges. The interest rate may also go up to 29.99%. A person can also expect to receive many phone calls from the credit card company.
After four months
When a person has reached four months of non-payment a credit card company will charge off the balance. This means that a collections company will receive the debt and will relentlessly try and collect it. A charged off debt will also severely impact a person’s credit score. The IRS will also make a person pay taxes on the charged-off debt.
If a person is facing insurmountable debt, they should not be embarrassed about it. This situation can happen to anyone. A legal professional who specializes in bankruptcy can help their client understand their legal options and help them create a fresh financial start.