Credit Card FAQ

Can I be Arrested for Credit Card Debt?

23 September 2010 by CreditCardsCo™

During this difficult financial time, many people are having trouble making the payments on all their bills and the question arises, "Can I be arrested for credit card debt?" Of all the worries everyone has about employment and making ends meet, we don't need to be worrying about jail time for not paying our bills too.

It is amazing how quickly things can change in a person's life to the point that they become worried about being arrested for credit card debt. The change from things being fine and comfortable to worrying where your next meal is going to come from can literally happen overnight.

Fortunately, you needn't worry any longer about being arrested for credit card debt. In fact, there is only one country left in the world that will still imprison people for not paying their debts, and that is Israel. Imprisonment is not a way companies can try to get you to repay your debt. This is fortunate, since you can't earn a living from behind bars.

What Are The Consequences Of Not Paying Your Debt?

Since you don't have to worry about being arrested for credit card debt, you're probably wondering what the consequences are. The worst thing that could happen is that you can be taken to civil court. The result of this will not end in jail time, but it's still a big time investment and the penalties can be harsh. If they win, which they likely will if the debt is really yours, they can file a judgment against you and your wages can be garnished until the debt is paid off. Or they could put a lien against your assets, like your home. This will make it impossible to sell the home, or refinance it without paying off the creditor.

However, being taken to civil court is not very common. It can and does happen periodically, but there is quite a bit of hassle involved for the debt collector to get to this point, so most don't bother with it. The more common results of not paying your credit card debt are, annoying phone calls from creditors, and reporting your lack of payment history to the credit bureaus. This may seem like not such a big deal when you were previously worried about whether you could be arrested for credit card debt. But, don't think you're getting off too lightly. Whenever you need credit, these debts will be there to haunt you. This can happen at times of desperate emergency, like if your car breaks down and you really need a loan to have it fixed. You may not be able to get the loan you need, and if you do, you'll probably pay dearly for it with high interest rates and fees.

Poor credit can also affect where you live. If it's time to move, you will have a difficult time getting a home loan. Even if you choose to rent instead, most rental companies run credit report and determine whether they will rent to you based on that information. If they do decide to rent the home to you, you could end up paying large amounts of deposits.

What Can Be Done?

The best way to handle outstanding credit card debt is to contact the creditors and tell them what you can do. They will, of course, try to get you to pay the entire amount. Don't allow them to intimidate you, they're just trying to see if they can push you to come up with the money. It's best to come up with a plan before you speak to them. Work out your budget and determine how much you can afford to give them monthly. Ask them to put you on a payment plan for that amount. Remember, you are the one with the power. They will try to scare you and intimidate you, but in the end, since you know you cannot be arrested for credit card debt, it is up to them to work with you if they want the debt paid. The last option for getting out of credit card debt is bankruptcy.

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