There are two places that you can find information on defaulted credit cards, on your credit report or from your credit card company. In some cases, your credit card company will sell your account to a debt collector, which means you’d have to contact the debt collector to find the information that you want. You might want to just look at your credit report, because if you talk to the debt collector, you’ll have a hard time getting them to leave you alone.
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The only problem you’re going to find when using your credit report to learn about your credit card default is that if you’re looking for specific information, it’s not going to be there. On your credit report, you’ll find the name of the company that owns the credit card debt, how old the debt is, when your last payment was, the maximum dollar amount of the credit card debt and how much you currently owe.
How can I dispute the dollar amount of my defaulted debt?
A very common problem that many people face when credit card debt collectors buy your debt from the credit card company is the credit card debt is often higher than the actual amount owed. In some cases, this is simply due to a credit card default interest rate being assigned to the account prior to the debt being sold, which increases the debt exponentially.
In other cases, a credit card debt can be sold prior to a payment being credited to your account, which causes the debt to appear higher than what you actually owe. The problem is that if the debt is sold to a debt collector and you make the payment to the credit card company, the debt collector may never apply the payment to your account because you didn’t pay it to them.
When this happens, you’ll have to work with the credit card company to pay that payment to the debt collector. If the credit card company has already cashed the check, you may end up having to talk to a lawyer to help you sort out the details.
You could also dispute any debt on your credit report. When you dispute credit card, there is an explanation box in which you can explain why you are disputing the debt. You’ll also want to write a letter to the company that owns your debt disputing the amount of the debt.
You need to be prepared to show proof that you don’t owe what is claimed. The credit card company or debt collector is not required to provide proof of their claim, the law is on their side. You’ll have to provide credit card statements, bank statements, or whatever other proof you have that the credit card debt isn’t the correct dollar amount.
One area of interest is that according to the Federal Reserve, if you’re disputing a credit card debt, and you make a payment to the company that holds your debt, they are not allowed to apply that payment to your debt until the dispute is resolved. That’s something to keep in mind if you plan to dispute the amount of your defaulted debt.
What happens when I default on my credit card debt?
You cannot be arrested for credit card debt. However, if you don’t pay your credit card debt, it will adversely affect your credit. What’s more, if you become seriously delinquent, the credit card company that owns the debt is likely to sell the debt to a collection agency.
A collections agency or debt collector claims all rights to your credit card debt, including the right to sue you for the debt. While legally, a collection agency or credit card company can garnish your wages or seize your property once they won a lawsuit against you, in most cases a judge will not agree to wage garnishment or property seizure.
The reason for this is that a judge will not agree to allowing a credit card company to take anything that would prevent you from earning a living or paying your bills. In addition, most would not put your family out on the street so the creditor could sell your home to pay off your debt.
You can’t overlook the impact of the defaulted credit card debt on your credit score. According to the Federal Trade Commission, a defaulted debt can remain on your credit report for seven years after your first missed payment.
If you sporadically make payments over the years, that debt could potentially be on your credit report for well past the seven years. Each time you make a payment on the debt, the default date restarts to the day you made a payment.
How can I avoid defaulting on my credit card debt?
If you’re in financial trouble, and considering the possibility of defaulting on your debt, the first thing you want to do is talk to your creditor. If you have a history of making on-time payments, and now you’re struggling, the creditor may be willing to work with you to prevent your defaulting on the debt.
Now, this isn’t always the case. Some creditors can be very nasty about the potential of your defaulting on your credit card debt. There may be nothing you can do than continue to make your payment as best as possible.
You might also want to consider talking to a consumer credit counseling service for tips to manage your credit card debt. However, many creditors won’t work with the services until you’ve actually defaulted on your debt, making it a tough situation overall.
The bottom line is that you should try to keep your credit card debt to a minimum. This way, if things get tough, you don’t have to worry about defaulting on your loan.
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