Credit card debt is mostly unsecured, unless it is a prepaid credit card, or has any asset as a backing.
But, a credit card coming with a backed up security or asset, is a ‘one in a million’ chance of occuring. Yet, this shouldn’t make you ignore the fact, that a creditor can take away your home and other properties, if you are unable to pay off your credit card debt.
Credit card lenders and collectors do have their own ways to collect debts from defaulters. They also have some rules to their side, and that’s when forfeiture of properties come into the picture.
At first, they will do nothing, that’s the first time you default on the monthly payments.
By the next billing date, you can expect to get a message, or a phone call from the bank or the credit card company, and you will be notified that a payment is missed, and hence you have incurred some penalty and late fees.
If you again become regular with your payments, and don’t miss the next payment date, then all will cool down, and you can keep on using the credit card, like you normally do, by maintaining all the future monthly payments.
However, if you consecutively miss 2 or 3 debts payments, then expect to see some action related to collection and harassment.
There will be threats, and the creditor might even send bank representatives to discuss the payment issues you are facing. Heated up arguments and harassing calls will be frequent in this stage.
Next, if the creditor sees you as a potential defaulter, and you are far away from paying your debts anytime soon, then your debt account / credit card account will face a write off.This is the situation when a lender or creditor loses all hopes to collect the debt from you, as of now.
But, this doesn’t mean that you have become free of the debt liability. In most of the cases, a debt account is sold to collectors by banks and financial institutions, after the account is written of, and the respective bank has shown it as a loss in its tax papers.
It is then probably, that the real problem takes place.
After the creditors or collectors win the judgment, they become legally entitled to go after your personal / business property and assets.
But they won’t readily do so, because collecting assets as a collateral and penalty is not easy when the debt is itself unsecured.
So, to start off the collection on a good note, they will first try to do wage garnishment, or garnish your business income. Then if they are satisfied, they will leave the matter there, and let your wages and income be garnished, till you have paid off the debts.
But, if it gets impossible for them to do a wage garnishment, then they will try to seize your assets and go behind your personal property.
But, if for once they get sanctioned by the court to collect the debt amount by forfeiting your assets, then you are in a bad mess, and might have to go through several lawsuits and some drastic measures to save your assets.
It will involve lawyers and court dates, and you have to get professional help, to avoid forfeiture.
Yes you have, but you got to act right now.
There are several options to clear your credit card debt. You have two highly effective options, one is debt consolidation and the other is the debt settlement.
In fact, going for the right debt relief option, in the right time, will definitely save you from all the harassments, and complications that can arise from evading credit card debt.
In debt settlement you get to negotiate with your creditors, for the total amounts you owe. If a settlement is done perfectly, then you can have a huge amount of the original debt forgiven. And, believe it or not, the creditors quite often enter settlement deals, because it’s better to get back something rather than nothing. And, for a low debt amount, there are high chance that the creditors won’t be able to win a judgement to do forfeiture of the debtor’s assets.
On the other hand debt consolidation will let you arrange the debt payments systematically, over a spread out time period.
Therefore, check your options and go for professional consultation before it’s too late!