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Hasty Credit Card Application Can Lead to Bankruptcy
Many people who make multiple credit card applications are not aware of possible outcomes. So, they end up with a credit card debt. This debt is always much bigger than the original sum of money owed. For example $300 can turn into $1300 because of late payment fee and default annual fee. If you are lucky you manage to pay it off, but if not... You may go bust.
So, bankruptcy is the worst outcome of having an excessive number of credit cards or unwise management of one's personal finances. In this situation the lender's goal is to get the money back. So, they may start offering you credit repayment plans or maybe advising you some credit counseling agencies. The worst thing they can do is selling your debt to collection agency or take legal actions.
It is obvious that if you owe money, you have to pay them back. The sooner the better. If you do not carry out your obligations, or if you do not show any willingness to cooperate the lender will go to the law. And the law will not be on your side.
For a credit card issuer customers' debts are the ever-living source of income. So, be prepared that your bank will get you miss the payment or just be late with it. In this case late payment fee will be applied to your debt which can make it even heftier. In fees and default interest rates banks earn millions of dollars annually.
What else can a bank do to make you pay? Well, of course credit collectors and banks are not allowed to overrun the law, but this is not a perfect world and... Harassment, threatening phone calls, lies are all the tools used to make a debtor pay. You may be threatened with your car repossession or with garnishing your wages. Remember, this can be done only under the court decision.
Now, let us take a closer look at the most possible circumstances under which you may be sued. There are three of them.
First of all, if you are 60 days late with your payments, the lender can start legal actions against you.
Secondly, if you have been working with the same company for many years, it will be a sign for a lender that you will not quit your job. This means you have more chances to pay off the credit card debt and the lender will take legal actions against you.
Thirdly, if you are under 40 the creditor will think that you will be employed and will have more chances to pay off the debt than an older person.
There is one more thing. If your credit card application was secured by a cosigner, the lender will contact him or her and ask for payment.
Well, your ignorance of credit law and unwillingness to pay can result not only in credit debt but also can damage your reputation. I believe there is reason in cooperating with your moneylender in case of credit debt repayment.
Comments• News Comments... |
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I have never run into debt. But I can imagine how awful it is. It's very difficult to start in life after that. It will take much time.
My friend once had an awful situation. He ran in debt and took great pains to get rid of it.
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