What happens if I let my credit card go to Default?

Question

I can't afford to make the repayments at the moment.

Answer 1

The credit card company will use a debt collection agency/court/baillifs.

You don't want to go down that road.

Better to discuss with them and come to an arrangement as to how much you pay off and when.

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Answer 2

You get a bad credit rating and those late payment charges will start adding up.

Your choices are two really.

First is to contact the credit card company and explain the situation to them. They'll probably be understanding if they know you intend to pay but they will still charge you something.

Other option is to get a new card (with a lower interest rate), transfer the whole balance to it and that should buy you a month-6 weeks to get some money together when they come calling. Most cards do now charge a fee for a balance transfer so you just need to weigh up which will be cheaper for you in the long run.

Don't ignore it. Your credit rating is important and you'll need it to buy a house down the line.

Answer 3

I would speak with your credit card company and explain the situation to them . If you offer to pay them a smaller amount of money for a short period of time, this might be acceptable to them, as receiving some money from you rather than no money is still in their best interest. I did this for my mother, and they even stopped the interest on her card for a six month period. They may even send out a budget plan for you to fill in, so that way you can show them the situation of your finances, and they can make an informed decision. If you are having serious problems with debt, why not contact the Citizens Advice Bureau, or the Consumer Credit Counselling Service, both of which will provide debt advice free of charge. I'm assuming you're in the UK. Good luck with it, and try not to worry.

Answer 4

Firstly the credit card company will pass it on to a debt collection agency who will get a Statutory Demand issued. The debt collection agency will atempt to serve this demand on you at any of the addresses you supplied the credit card company with. They can post this through your letterbox if they beleive that you will receive it.

If you do not pay the sum detailed on the demand in full, or have the Statutory Demand set aside, the solicitors working on behalf of the credit card company will get a Bankruptcy hearing date and a Petition issued.

Again a debt collection agency/process serving company will attempt to serve you with the document and if they either do serve you personally with it or are unable to meet with you but feel that enough evidence has been obtained to prove that you live at or receive mail at an address, they will crave leave to the court for substituted service by means of publishing your name in the local papers etc.

You really should contact the credit card company and explain your situation to them. Ultimately, they would rather receive something than nothing. Plus bad credit hangs over your head for a long time, it can take up to 10 years for some companies to go anywhere near you after a default.

However, a friend of mine had £10k credit card debt and the debt collection agencies haven't caught up with him yet, although as soon as you apply for credit or register on the electoral roll at an address, you will be quite easy to locate.

Good luck.

Answer 5

With this, you can't bury your head in the sand. The problem will only get worse.

As others have said, your credit rating will nosedive, which could affect you in the future, and the credit card company could take legal action an send round bailiffs to take your stuff.

The best course of action is to talk to the company, and explain things. They should try to come to an arrangement regarding payments.

If your money problems are short term (like just a difficult month because of car insurance or something), you could ask your bank for an overdraft facility, just to tide you over.

Other than that, I can only suggest you sell some of your possesions.

Answer 6

1 Get in contact with your credit card company. They Can And Will arrange a repayment scheme for you. This is by law in the UK.

2 Failing this, a debt recovery business will contact you, which will contact you and charge you further.

3 You will be made bankrupt, by the courts,and, Bailiffs will be sent.

Answer 7

Your interest rate will go to the highest stated rate, usually around 28% and you credit will be seriously damaged. It is best to call the company and work out a payment arrangement. A credit card company looks bad when it has a large number of defaults. They will be happy to try and work something out. Anything is better than default.

Answer 8

They will send it to collections as well as report it to all the bureaus and ruin your credit. Have you talked to them at all? A lot of companies will work with you so it doesn't go into default. Give them a call and see what they might be willing to do for you before you just stop paying. If you just don't pay it over a period of time, they will take you to court and get a judgment and even garnish your wages. Hope this helps!!

Answer 9

Don't do that. You will get a bad credit rating and it will create problems if you apply for a mortgage or credit card as you may be refused. Why don't you just pay the minimum charge which is usually around £5 depending on your balance.

Answer 10

Why don't you go in the bank and have a chat with someone to talk about your situation? They are very understanding and can help you, after all they'd rather have their money back even if does take years! Please go and talk one of the advisors, that is what they're there for anyway. Don't let your card go to waste and ruin your credit history. Talk to someone, it's better =) Tell them how worried you are and they can come to an agreement with you on LOW monthly payments. Good luck to you and be strong!!! Please don't stress out the bank can help OK.