What Assets Can Credit Card Companies Take From You
Post on: 26 Июль, 2015 No Comment
Identification
Credit card debt is an unsecured loan; so basically, a credit card company cannot legally take any physical assets from you. A physical asset would be your home, car, stocks, bonds, or anything that you own that has a tangible existence. However, a credit card company can go court and win a judgment against you, which may lead to you having a wage garnishment attached to your wages. So in the long run, defaulting on a credit card debt can cause you to lose a portion of your income, which is an asset. However, this unique situation would vary according to your credit card provider.
Prevention/Solution
In order to avoid being deemed a credit risk, you should attempt to stay current on your credit card payments. In most cases, you will have to miss two or three payments before your credit card provider demands you pay the entire balance, including late fees and other penalties. In order to avoid a severe default, you should seek help at the first sign of financial trouble. There are numerous ways to do so. For example: you can borrow money from a parent, spouse, or friend; you can transfer the debt onto another credit card with a lower interest rate; or you can contact your credit card provider and explain your financial hardship. The worst thing to do, if faced with this circumstance, is to default or do nothing.
Warning
If your credit card balance remains unpaid, i.e. 180 days or more, typically there will be no simple way to resolve the matter. Reason being, after 180 days of default, your credit card debt has been charged off. This means your debt is considered an uncollectable debt to your lender. You will still owe the outstanding debt, but in order for your credit card provider to remove the debt from its books the debt had to be charged off.
Effects
A charged-off credit card debt will be recorded on your credit report, which will directly affect your credit rating and your FICO score. In most cases, you would have seen a decline in your FICO score after only missing a few credit card payments because some credit card providers report to credit reporting agencies every month. Under the Truth and Lending Act, you have to right to view your credit report annually for free, so if you would like to see the consequences of having unpaid credit card debt, you’re free to do so.
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