Many individual borrowers have the misconception that a credit card company can’t really do anything to hurt you if you are unable to pay. This is not true. Aside from the obvious thrashing of your credit, the next few paragraphs will explain what is very likely happen if you fall behind and are unable to pay a credit card debt.
First come the collection calls from the credit card company itself. These calls will come from morning to evening, and sometimes the same collector will call five and six times a day. Obviously this is very intrusive into daily life and gets old very quickly. Attempting to reason with a collector is almost always futile. It’s not their fault. The only acceptable outcome from the call from their perspective is immediate payment on the debt. Sometimes they will even call your workplace or relatives in order to compel you to pay.
Next, the debt will most likely be turned over to a collection agency or law firm. They will call and send very threatening letters to attempt to compel payment. These companies can be even more bothersome than the credit card companies themselves.
If the calls and letters don’t work, the next step for them is to file a lawsuit. If they win the lawsuit, or if you don’t respond, they will have a judgment against you. This is where the real problems start. A judgment is an automatic lien against all real estate in the County in which the judgment is recorded. Once they have a lien, they can foreclose against your house. Yes, they can foreclose against your house.
However, that is not often done. They have a much better remedy after they have a judgment. In most states, they can attach your wages. In other words, they contact your employer and have them deduct money from your paycheck directly in order to pay the debt. In Pennsylvania, where the law firm of Steidl and Steinberg is located, wage attachments are not permitted by law for this type of thing. However, what is permitted is attachment of a bank account. They can freeze your bank account and take whatever money is in the account up to the amount of their debt. This is very problematic, as most people nowadays have direct deposit for their paychecks. So, that direct deposit money will be frozen and then taken. Also, they don’t warn you that it’s coming. So, overdrafts and bounced checks (which is a criminal offense) all of a sudden become a big issue.
If none of that works, or they can’t find out where you bank, they can send a sheriff out to your house and do an inventory of your possessions (including paid off vehicles). They will sell your possessions at an auction and apply the proceeds to their debt.
In short, the idea that a credit card company can’t really harm you is simply not true. There are lots of remedies for a credit card company, especially once they have sued you and won. They can and will use the above methods to collect if necessary. So, what’s your remedy to these aggressive tactics to collect? One of the most common is bankruptcy, which immediately halts collections no matter what stage of the process they are in. Steidl and Steinberg specializes in bankruptcy and would be happy to meet with you to discuss possible options. Feel free to contact us for a free consultation.