Failing to pay your credit card debt could result in phone calls from creditors and collection agencies based in California and around the country. It may also result in lawsuits, wage garnishments and other penalties. However, there are several strategies that might help you get current on your accounts or have your debts forgiven.
Talk to your lenders
It is in your best interest to contact the issuer as soon as you don’t think that you’ll make your next payment by the due date. The credit card company may be able to extend the due date or roll your next payment back into your outstanding principal balance. A credit card company may also accept an interest-only payment or make other arrangements so that you can avoid defaulting on the loan.
A balance transfer might help
Transferring a balance to a new card with a 0% interest rate may reduce your monthly payments by hundreds of dollars. Furthermore, it will allow you to put more money each month toward your principal balance, which means that you can pay down the debt faster. A personal loan or home equity loan may also be effective ways to consolidate debt at a lower interest rate.
Bankruptcy may be right for you
Filing for Chapter 7 bankruptcy may make it possible to eliminate most of your unsecured debts including credit card balances. A Chapter 7 proceeding generally takes four to six months to complete, and while your case is open, creditors cannot contact you or engage in other collection activities.
Unpaid credit card debt may do significant damage to your credit score and creditworthiness. You may also be subject to interest on an unpaid balance as well as late fees and other charges. Therefore, it’s critical that you create a plan to deal with your existing debt before it becomes truly unmanageable.