In order to properly manage your debt, you need to be informed- it’s that simple. Without adequate knowledge of the timelines associated with being in debt, your problems can swiftly expand in record time. Not surprisingly, overdue debts can have a significant negative impact on your credit score. This is why it’s so paramount to be aware of the general timeline that’s associated with being in debt.
Debt Timelines—What You NEED to Know
-When you miss the due date of your bill: You will receive emails, letters, and/or phone calls reminding you to pay your debt. If you know that you won’t be able to pay your bill by the due date, experts say that taking a proactive approach can help. Contact your creditor and fill them in on your situation- they may be willing to help you establish a feasible payment plan.
-If you still haven’t paid your bill 30 days past the due date: At this point, your creditor will most likely hand your account over to a collections department that specializes in retrieving due debts. If you don’t establish a payment or hardship plan with your creditor, they will likely report your account as “delinquent” to reporting bureaus.
-After no payments 60 days past your due date: Besides the expected accrued interest and late fees, you should also expect an array of phone calls, letters, and emails regarding your overdue debt. On top of that, your creditor will likely deactivate your credit card account until the issue is resolved.
-Getting a “charge off”: When a creditor is unable to collect their bill from you, they label your account a “charge off” and sell it to a third-party debt collector. At this point, it’s best to try and negotiate a settlement or payment plan with your original creditor as soon as possible. They would be more likely to offer you an ideal settlement.
-Summons to appear in court: If a third party debt collector decides to sue you, your best legal recourse is to show up in court. Do your best to keep your situation from escalating to this point, as a judgement in favour of the collector can lead to assets (like your bank account) being seized, or your wages being garnished.
For a free consultation regarding your debts, contact Clear Debt Solutions. These Certified Credit Counsellors are experts at handling a wide variety of debt issues related to credit cards, loans, lines of credit, store cards, outstanding invoices, late payments, collection agencies, aggressive legal collectors or high interest institutions.