What Is the Minimum You Have to Pay on Bills?

Bills can take many forms, from bills for utility payments to bills for various forms of credit, such as credit cards and loans. However, what all bills have in common is that they constitute a debt obligation. A person presented with a bill is usually legally obligated to pay the person issuing it. While the ways in which the bills must be paid back differ greatly, generally all bills must be paid in full.

Contracts

Most bills are issued as the result of an agreement, either written or oral, in which one party agrees to pay another party for a service rendered or an asset provided. In either case, the party receiving the bill is legally obligated to pay the bill, so long as the bill was legally issued. If the bill was not legally issued, then the person receiving it is not obligated to pay any amount on it.

Penalties

If a person fails to pay a bill on time, he faces a number of penalties. For example, if the bill is linked to a loan and the creditor reports the lack of payment to a credit reporting agency, the person's credit score could decline. In addition, the person could face serious legal problems. In many cases, a creditor will sue a person for an unpaid bill in civil court over breach of contract.

Civil Judgments

If a creditor sues a person in civil court over a debt, a judge will hear the case and decide if the creditor's claim has merit. If the judge rules that the debtor has a legal obligation to pay the creditor, then the debtor might be required not just to pay the full amount of the bill but also to pay the legal fees the creditor was required to pay to take the case to court.

Minimum Amount Due

A special case can be made for bills issued by a credit card company. Usually, credit card companies present account holders with monthly statements stating both what the account holder's outstanding balance of debt is and a separate number indicating the minimum amount that the individual must pay by the end of the month to avoid paying a penalty fee. This minimum amount varies depending on the company's policies, but it is usually a small fraction of the balance. However, the outstanding balance eventually will have to be paid off.