What happens if I default on a credit card?
If you default on a credit card in Tennessee, the creditor may take legal action against you. Depending on the creditor, they may simply contact you to attempt to collect the debt or they may pursue a lawsuit. If they sue you in court, they can obtain a judgment against you, allowing them to collect the amount you owe plus interest, as well as legal costs. If the court grants a judgment, the creditor may be able to garnish your wages or take funds from your bank account. This means the creditor will be able to take a portion of your wages or funds from your account until the debt is paid off. The creditor may also be able to place a lien on your property or other assets, which would prevent you from selling or transferring them until the debt is paid. Besides legal action, the creditor may report the delinquent debt to one of the three major credit bureaus. This may lower your credit score, making it more difficult for you to obtain financing in the future. Additionally, the debt may be sold to a collection agency. If you receive a collection notice, you should contact the agency and attempt to negotiate a payment plan. If you are having difficulty paying your debt, you may be able to request a hardship waiver from the creditor. This allows you to obtain a lower interest rate or a payment plan that fits your budget. You can also contact a credit counseling agency, which can provide you with additional resources and guidance.
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