Missing a payment for a credit card or another type of debt can certainly lead to a series of unfortunate events for Connecticut residents. Initially, late fees are assessed and the balances continue to mount. One’s credit score can suffer once credit agencies are notified of delinquencies, thus affecting the ability to obtain the best interest rates when making major purchases. Continued skipped payments can lead to repeated calls from collection companies and possible asset forfeiture should creditors decide to start the repossession process. It is important to understand the process of debt collection and how to avoid potential problems.
Consumers should never ignore their debts, according to financial experts. It is much better to acknowledge the situation and take the appropriate steps to address it. Ignoring the issue could eventually result in wage garnishments and bankruptcy — much greater issues than the stress of financial struggles.
If one payment is missed, a creditor will likely send a reminder by text, phone call or email, yet still notify the credit bureaus. When several payments are missed, the collectors begin to make more frequent attempts to secure payment. All during this time, late fees and additional interest is accumulating. Consumers should always be proactive if they are aware payments may be missed. Often, companies are more than willing to work with people to develop a repayment plan.
Debts are later moved to charge-off status when they are turned over to a third party collection agency. A consumer should still attempt to work out a plan with their original creditor, if possible. If all other attempts at collecting a debt have been unsuccessful, a lawsuit may be filed. Creditors may try to get money from consumers’ assets to satisfy debts. Financial advisers strongly encourage people to stay out of debt or to make a plan to reduce their current level of debt.
Having a large amount of debt can cause great anxiety, particularly if concerned with imminent asset forfeiture. A Connecticut bankruptcy attorney can assist clients in establishing a plan to get their finances back in order. An experienced lawyer can work to prevent repossession of assets, if possible.