If you are finding it difficult to repay your credit card debts on time, it is very important to know the consequences of nonpayment.
This will help you understand whether you can simply give up or whether you should take remedial action.
The first step that you should take is to determine the past record of your credit card issuer or unsecured lender.
Some credit card issuers wait for 6 months of default before they take the action of disposing the account to the debt collection agency.
Others proceed ahead with this task of within 3 months.
Some card issuers have an in-house agency.
This helps them recover maximum profit from the transaction without the credit card holder being aware of it.
You can find this information on the World Wide Web.
If you do not repay your credit card debt, you will be classified as a high risk borrower and your interest rate will be automatically increased.
As per the latest card act, non-repayment for a period of 60 days will result in an increase in the total amount payable.
If you opted for credit card before the card act came into force, you will be liable for an increase if you do not make regular repayments.
Further, penalties and penal interest will be charged.
All this will run simultaneously with the efforts of the credit card company to recover the maximum amount possible.
Repeated calls will be made, the executive will visit you and they may even get in touch with your friends and relatives if they are convinced that you are trying to avoid them.
Once you default for more than a few months, your account will be transferred to a debt collection agency.
The transfer will be done in the form of a sale.
The credit card company will recover the maximum amount possible and will leave the rest in the hands of the collection agent.
The agent's stance is to extract maximum payment from you.
In such a scenario, it is very obvious that you will be under tremendous stress and pressure all the time.
If you are of the opinion that there is no other alternative, then just keep in mind that you just have to get in touch with the debt settlement expert and get a settlement deal done.
Once this deal is finalized, you just have to repay 40% to 50% of the amount owed and your debt problems will automatically come to an end.