If you have bills you cannot afford to pay, it is never a good idea to avoid creditors. There can be serious consequences, and worse problems than unpaid bills.
Avoiding creditors for too long will cause services to stop being rendered
One problem you may face is losing services and possessions. As an example, if you do not pay your utility bills, the company may turn off your utilities. Ignoring bills like your car payments can result in losing your car.
When you owe money, creditors are likely to give you numerous chances to pay. You may receive reminders in the mail. If you ignore these notices, the creditors will turn your accounts over to a collection agency.
While creditors are usually reasonable when customers make an honest attempt to communicate and resolve unpaid bills, collection agencies want you to pay your bill, and want you to pay it immediately. After a collection agency has taken control of your account, they will send letters and contact you by telephone. The agent may threaten you with legal action if you do not pay your bill immediately.
Ignoring Collection Letters Can = Legal Action Against Your
Attempting to ignore letters and phone calls from collection agencies can eventually result in court action against you. If it reaches this point, you will either pay the overdue bills or surrender your assets to cover the debt.
If you die before your debt is paid, your assets can be taken. This can include assets you intended to leave to family members after you die. Your loved ones may not receive everything you leave for them in your will if you owe money to creditors.
An additional problem associated with debt is you will not be able to obtain traditional good credit cards. Cards that are designed for people with good credit have lower interest rates and a variety of other benefits.
You may find your only alternative is to apply for a bad credit card. If your credit is very poor due to unpaid bills, a secured card may be the only type of credit card available to you. You will need to provide a security deposit, and prove you have adequate income to pay your balance on a regular basis. The amount you can charge on a secured credit card is limited.
One benefit of secured cards is they provide the opportunity to rebuild your credit. When you pay balances on time, it will be reported to the major credit bureaus. If you are consistent with prompt repayment, your credit will eventually improve.
However, there is an easier way to be eligible for good credit cards. Paying all of your bills on time is the best way to enjoy good credit. If a personal or financial situation occurs that makes it impossible, contact your creditors as soon as possible. Most creditors are willing to work with their customers when they know the customers are being honest. They may offer you a payment arrangement, or a similar option.
Simply avoiding creditors is not in your best interest. They will take it to mean you have no intention of paying the money you owe. From harassment by collection agencies to ruining your credit, there are many repercussions to avoiding your creditors. Regardless of your situation, you can prevent unnecessary problems by taking action. Even if you cannot pay your debts immediately, taking action means you are responsible. You will benefit today, and in the future.