credit cards

How hard can credit card collector push?

Poriss says consumers shouldn't be fooled by these tactics. Odds are good that the issuer has already reported a negative item or will do so regardless of whether the consumer resumes payment. A hardship plan can involve closure of the account. That hurts the consumer's credit score and can trigger a brand new account number, which can restart the time clocks.

Harassment, skip-tracing

Federal privacy laws still apply regardless of the state where the consumer lives, McClary notes. That means credit card issuers can't call up someone's neighbors, relatives, employer or high school sweetheart and disclose the details of unpaid debts.

In practice, card issuers rarely resort to what's known as "skip-tracing" because the cardholder's contact information is usually recent and up-to-date. Calls to known associates may occur after the account is charged off.

Legal action

Credit card companies rarely take legal action against consumers who don't make their payments. More often, McClary says, they simply sell off the unpaid accounts and leave the hardball tactics to the debt collectors, who may resort to a lawsuit.

A lawsuit is never good news, but it can be a break for the consumer if it results in a settlement, Poriss says. Consumers who can set aside some money for this opportunity are well-advised to do so, she says.

Imprisonment

There are no debtors' prisons in the United States.

A few attorneys and debt collectors have used other creative legal mechanisms, such as a failure to appear in court, in connection with debt collections lawsuits to scare people, but these occurrences are very rare, McClary says.

"You can't be thrown in jail for debt that you owe to a credit card company," McClary says. "There is no cause for most people to worry about something like that."

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