What Happens If You Don’t Pay Your Credit Card Bill?
by Mr Credit CardOne of our readers, Luis, had this question:
So in the wake of the Circuity City business faltering… in other words, going under… Can I get away with not paying of their credit card?
Luis,
When a company files for bankruptcy, it’s a little different than when a person files for bankruptcy. Usually a corporate bankruptcy is more of a “restructuring” plan that involves staying open, making some cuts, and working out an extended period of time to get their finances in order and repay many of their debts.
To that end, Circuit City has closed over 150 of it’s stores, but kept many open. The credit card that you have is most likely financed by CHASE rather than Circuit City (since they have a partnership in order to offer credit to Circuit City’s customers). Check your terms and conditions to be sure.
Now, regardless, you will still have to make your credit card payments. If you do not, the credit card company will simply sell your account to one of the many vicious collection agencies, and it will ruin your credit score, etc.
Even if Circuit City ends up going under completely, you will still have to pay your credit card debt – you can bet that they will sell your credit card account if they need to in order to raise money. No breaks for consumers when a company goes under – especially where credit is concerned!
Another reader, Ralf, had this question:
My filing for bankruptcy will be filed soon. I heard that Wells Fargo is notorious for freezing accounts. Can they freeze my account even though I have no credit cards / loans or any credit with them associated with my bankruptcy? I only have a visa check card with them. More importantly, if they can freeze my funds, where should I get my paycheck deposited to avoid this mess.
Sincerely
Ralf
Hi Ralf, thanks for your question. I am not familiar with Wells Fargo’s bankruptcy policy. I did do some research into it, and I see what you mean about them freezing accounts from several consumer reports online.
You can either call them, explain the situation, and as them what to do, or you can go ahead and move your direct deposit to a different bank.
If you don’t have any credit lines with them, then there is a good chance that your bankruptcy won’t make a difference. Normal bank accounts are not usually included in a bankruptcy unless you own the bank money in one form or another.
Just to be on the safe side though, you could open up another checking account prior to your bankruptcy. If Wells Fargo gives you trouble, it will be a simple matter to have your direct deposit switched to the new account. If all goes well, you can simply close out the new checking account, or keep it as a backup. Just make sure you get one that doesn’t have monthly fees.
And one last question from Bonnie:
My boyfriend put me on three accounts as an authorized user. I used each one occasionally a few years ago but have not used any of them for the last few years since I established my own credit. I had no knowledge of his balance transfers, how much the balances were or his payment history. Now these three accounts are affecting my debt ratio and so my credit score. We are not married. Can he request that I be taken off his accounts? Can I request or should I demand to be taken off. He has closed the accounts in order to pay them off. What is my liability? Awaiting your reply.
Hi Bonnie,
As an authorized user you have no liability for the debt on those credit card accounts. However the amount he owes on them could certainly be lowering your credit score.
In this situation, te best thing to do is to give him a call and have him remove your name from the accounts. This is not normally something that you can do yourself since *technically* it’s not your account.
All he will have to do is give the credit card companies a call, and ask that your name be removed as an authorized user.
Once he does this, wait a month or two and then check your own credit reports to be sure that the accounts are no longer showing up each month.
Have a question for us? Leave a comment below!
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January 20th, 2009 at 14:20
Hi Mr. Credit Card!
I had a quick question. So say I did owe a bank money and put them in my Bankruptcy, how will this affect me now and later? Will I be able to open a new bank account? Will this prevent me from getting loans later in life? Does it ever come off my credit report like a normal credit card?
Thank You!
Jack
January 22nd, 2009 at 07:32
Hi, i was hoping you may be able to help.
I had a credit card with nationwide about 9 years ago and started to miss payments. I then had a visit from a man at nationwide and i set up a payment plan to clear down the debt. After six months the money stopped coming out of my account even though i still had £1097 outstanding. I tried to call them but they just told me i would be called back but they never did. I have had no further contact with them for about 4 years via email, telephone, letter etc.
Yesterday i received a letter from them saying that i missed the November 08 payment and December and now i need to pay the rest of the debt off (£1097).
Can they do this as i haven’t received anything from them be it statements or letters and then they just contact me out of the blue years later.
February 4th, 2009 at 16:32
I have a WAMU credit card with a balance of 16K and I’m unable to make the payments at this time. WAMU has been sold to CHASE and that is when I bank. If I don’t make the payments on the credit card can or will CHASE have the right to deduct money from my accounts?
February 5th, 2009 at 04:52
Hi,
I was recently laid off and it came to the point that i had to give my car back to the bank and stop paying on my credit cards because i could not afford them anymore. Now, should i file bankruptcy on them or just let them be? Either way, my credits trashed…but would it be worth while to file or just let them write them on my credit report as bad debt?
February 5th, 2009 at 06:10
Hello Mr. Credit Card,
How much or how many points does your credit score goes down if you fail
to pay one credit card ($14,000) but continue to pay your mortgage and
other debts? I’m NOT planning to file bankruptcy. Or can I also negotiate a
lower complete payoff balance with them?
Thank you
February 13th, 2009 at 18:01
i would like the answer to Tony’s question as well…
April 29th, 2009 at 02:08
I had a chase credit card and was not able to keep up with the payments. So now I owe them 4000.00 What happens if I don’t pay them? My money is deposited into chase every month.
September 19th, 2009 at 18:41
Hi,
I live in N.C. In June 09 I had a heart attack, which I ended up with a quadruple bypass and a defibrilator. I am already retired and on a fixed income. My problem is that I owe $12,000 in credit card debt and at the moment I am not behind on them (3). I now have a lot of medical bills and I cannot pay them and the credit cards. What will happen if I don’t pay the cc.
Thanks,
Joe
September 22nd, 2009 at 17:57
I am working with a debt consolidation company and am not paying on my credit cards. They credit card companies keep calling, I do explain my situation and that I am working with a company but still the keep calling. What can I do? Can they sue me? Can they take me to court?
October 2nd, 2009 at 01:54
HELLO,
I haven’t been able to find a job for about 4 months now and all of my loans and credit cards have gone to collections and maybe pressing charges. What will the judge do? What will happen to my credit after going to court? Is it better to make an agreement with the creditor or just let them take me to court?
November 29th, 2009 at 21:02
Pathetic!!!
January 18th, 2010 at 21:32
I have been current on all my bills for the last 9 years, never late, paid on time. I have recently had a substantial decrease in income, I could not pay on 3 credit card bills for the last three months. It bothers me, I did not want to ruin the good credit that I have established for so many years. There is no way I can catch up on the late fees, and overlimit fees that have accumulated. Should I just not pay them? Should I make an arrangement? Should I file bankruptcy?
January 26th, 2010 at 16:27
Hello,
My wife has credit card with a delinquent balance of $6,000. She making her minimum payments as required when all of a sudden the creditor tripled her percentage rate. With this increase the finance charges went up and she was no longer able to make the minimum payments. Then late fees started getting taked on. She tried talking with the creditor but they would not budge. She got a letter in the mail the other day stating they were a law firm and were attempting to collect the money. She talked to the company of the phone and they of course gave her the third degree, but we just can’t meet their demands for payment. My question is what can be done to her in this situation. She doesn’t work and the house and cars are in my name. I know different rules apply for each state so we live in South Carolina. Thanks in advance for any advice you can give.
January 28th, 2010 at 01:23
i can’t make my credit card payments my husbands job went down in hours and i am on social security. My question is ,the cards our in my name and i am married thow to my husband can the garnish his wages or mind like i said before i am on social. Or will the just put a lean on our house. Thanks lisa
February 12th, 2010 at 23:15
I owe $35,000 total of 3 credit cards. I have managed to take care of the payments up until now. My credit score was 740. If I stop making payments on all 3 credit cards (Visa, Mastercard and Discovery) Can I get sued??. If I begin working, can my check get garnished?. I am aware my credit would go bad for 7yrs to begin with but can these 3 agencies take legal action against me?? and for last, I’ve heard that it’s worse to deal with those companies that reduce 70% of your debt for a lower monthly payment because they get a comission of that payment. Thanks. Adry.
February 13th, 2010 at 03:20
Chase bank sucks!!!!
They get bailout money and raise rates!!!!!
I hope you all declare bankruptcy, walk away guilt free, built up your credit and have happy, healthy lives!!!!
March 5th, 2010 at 12:13
Hey Adry,
I am in the same situation with about $40,000 in credit card debt? I am late on about 3 cards too. I owe Amex $6,000 and they offered to settle for 65% or $3,800 to be paid in 30 days? Does anyone know if they can settle for less if I countered? The agent from CT Services says that is the lowest. Anyone know??? Thanks to all…