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| Coping With Unpaid Credit Card Bills |
By:
Nicholas Hunt |
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As we say goodbye to the years of affordable and simple debt that we lived through during the economic boom of the last ten years, millions of people are facing up to the worrying fact that their credit card debts are too high to be sustained for long. Even if your economic circumstances haven't been harmed by the slowdown, many credit card issuers have been pushing up their interest charges in contrast to the low base rates determined by the European Central Bank. The upshot is that making the monthly repayments is getting ever more trying.
And of course, many individuals have found their income falling during the recession, and so sizeable numbers of us now face the expectation of not being able to pay our credit card repayments and getting into arrears. What is the effect of this?
The first thing to do is to keep your head. Although an important matter, credit card debts are not secured on property and so your creditors can't force you to sell your home to repay the balance, neither can they have it appropriated from you.
Also, you can't be arrested or put in prison for failing to keep up with your commitments. You can of course be sued, but this willl be in a civil court rather than a criminal one.'
In reality, most banks would rather not take legal action as it is costly, not particularly good at recovering the debt, and bad for their reputation. Because of this, credit card companies are usually prepared to negotiate a reduced monthly payment that you will be able to manage more easily. You may also ask for interest costs to be frozen so that you can get back on top of your debts, but this is less likely to succeed.
The prospect of contacting your creditors and asking for help can be intimidating, but there is plenty of help available from finance charities who can counsel you on the best course of action, and may even take your case on and negotiate on your behalf.
So, if you find yourself incapable of paying your credit card arrears, don't try and bury your head in the sand: take some pre-emptive action and take advantage of the help that's on offer.
About the author: Martin writes for Debt Nation, where you can read more information about handling credit card arrears at http://www.debtnation.co.uk/credit-card-arrears.html along with other articles on money problems. |
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