What Happens if I Ignore a Debt Collector?

Receiving phone calls and letters from a creditor after you've missed a payment can be a stressful experience. Even though the Fair Debt Collection Practices Act limits how a creditor can contact you, letters and phone calls can still become frustrating when you don't have the money available to make your past-due payments. However, ignoring a creditor's attempts to contact you can invite serious consequences.

Fees

A creditor typically charges a late fee if you miss a debt payment. If interest and late fees drive your balance over your available credit limit, the creditor may also assess an overlimit fee. These fees continue each month that you fail to make payments on time or maintain a balance above your credit limit. Late fees and overlimit fees can also make it more difficult to bring your account current. If you stay in contact with your creditor, they may agree to waive some or all of these fees; however, if you ignore letters and phone calls, the creditor will not be likely to waive them.

Credit Damage

A payment that is less than 30 days late will not typically affect your credit; however, if you ignore your creditor's attempts to collect, and you let your account exceed 30 days past due, the creditor typically reports the late payment to Experian, TransUnion and Equifax, the three main credit bureaus in the United States. A negative entry on your credit reports can lower your credit score, which can reduce your ability to obtain loans, credit cards and even employment. If you let your account reach 60 or 90 days late, negative entries reported by your creditor can cause even greater damage to your credit.

Forwarding to Collection Agency

Continued evasion of creditor collection efforts will typically compel your creditor to forward your account to a third-party collection agency. The collection agency may act on behalf of the creditor, or may purchase your account at a discount. After the creditor sends your account to a collection agency, you typically lose the ability to negotiate with the creditor to bring your account current. Instead, you will have to deal with the collection agency, which may be less likely to accommodate your financial circumstances.

Legal Action

If a creditor or debt collection agency cannot contact you after repeated attempts, they may choose to pursue legal action against you by filing a civil lawsuit. If the agency or creditor wins a judgment from your county municipal or magistrate court, they obtain the legal right to collection strategies such as garnishment of your wages or bank account. A judgment places a lien on any real estate you own, preventing you from transferring or selling your real estate until you pay off the judgment. In some cases, a judgment creditor may also force the sale of real estate or personal property you own to satisfy your debt.