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In the current economy, it is not uncommon to fall behind on bills. Many people are dealing with unemployment or underemployment, unexpected medical bills, and other circumstances that lead to mounting debt. Sometimes, it is easier to pretend that these financial problems do not exist. However, there can be serious consequences from leaving debts unpaid, so it is important to work out a plan to pay your debts.

Collection Calls

Shortly after missing a payment to a creditor, you will start receiving collection calls. Credit card companies are notorious for calling within a few days of your first missed payment. They may call repeatedly, threaten legal action, and hassle you about paying your debt. The good news is that the Fair Debt Collection Practices Act protects consumers from harassment from debt collectors. Additionally, if you choose to file for bankruptcy, an automatic stay stops all collection activity against you from the time you file.

Credit Score

Creditors begin reporting missed payments to the three credit bureaus between 30 and 90 days from the time of your first missed payment. These late payments will be updated each month, so the problem will only get worse the longer your debts remain unpaid. Late and missed payments are one factor in the calculation of your credit score.

Wage Garnishment

Your creditor may turn your debts over to a collection agency or, if your debts are significant, the creditor may choose to file a lawsuit to seek repayment. If your creditor sues and wins, the court may garnish your wages. This means that there will be a payment automatically deducted from each of your paychecks until the debt is repaid.