Unpaid credit card debt doesn’t disappear. If you ignore it, the consequences get more serious over time. These consequences can affect your credit, income, and legal standing.
Debt collection actions get aggressive
When you stop making payments, your account gets sent to collections. Debt collectors may start calling or mailing letters regularly. Under the Fair Debt Collection Practices Act, they must follow rules, but many still pressure people into paying. In Tennessee, creditors may even file a lawsuit to collect the debt; if they win, they can ask the court for a judgment against you.
Wage garnishment can follow a judgment
Once a creditor gets a judgment, they can request wage garnishment, and your employer will have to send part of your paycheck to the creditor. In Tennessee, up to 25% of your disposable earnings can be garnished. That can make it even harder to pay your regular bills.
Your credit score takes a hit
Late payments and charge-offs stay on your credit report for up to seven years. This lowers your credit score, making it harder to get approved for loans or rent an apartment. A lower score can also increase your interest rates on other financial products.
Bankruptcy can stop collection efforts
If the credit card debt feels unmanageable, bankruptcy may help. Filing for Chapter 7 or Chapter 13 can stop collections, lawsuits, and garnishments. In Tennessee, most unsecured debt like credit cards can be discharged in bankruptcy. This gives you a chance to reset your finances and stop the stress.
You have options before it gets worse
Ignoring debt only makes things harder. But if you’re struggling, you do have choices. Tennessee law allows for protections like exemptions on certain income and property in bankruptcy. Exploring solutions early can save you from harsher consequences later.
