What happens if I default on a credit card?
If you fail to make payments on your credit card debt in the State of California, the credit card company can take specific legal actions against you in order to collect the delinquent amount due. The most common action is to file a lawsuit in civil court, which will target your assets or seek wages from your paycheck. If the credit card company wins the case against you, the court may enter a "judgment" against you for the debt. This will allow the credit card company to garnish your wages or attach a lien to your assets. If a lien is attached to your assets, you will be required to pay the debt in order to sell or refinance the asset. In addition to potential civil court action, the credit card company may choose to report your delinquency to the major credit bureaus. This will have a negative effect on your credit score and make it more difficult to obtain other loans in the future. Finally, if you fail to pay your credit card debt, the credit card company may choose to contact a collection agency. A collection agency may be able to collect delinquent amounts, but they may charge you additional fees and interest on the balance due. If you find yourself unable to pay your credit card debt, it is important to contact the credit card company immediately to make alternate payment arrangements. Failing to pay your debt will result in additional costly legal and financial consequences.
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