When you fail to make payments on a credit card, your credit card company may opt to get the money through seizure of your bank accounts. Account seizure is incredibly disrupting, as you can't use the accounts to pay for so much as a stick of gum until the debt is paid. Thus, when account seizure happens due to credit card debt, you must take steps to protect your assets and remove the debt you owe as quickly as possible.
Stop Direct Deposits and Withdrawals
When a credit card company seizes your bank account, they can take any additional monies that come into the account, with some exceptions like Social Security. Talk to your human resources department at work and stop direct deposit of your paychecks. If you have any bills you pay by direct deposit, you'll need to stop those withdrawals temporarily or withdraw completely from automatic bill pay systems your providers have. This way, your account won't overdraw and you won't get charged overdraft and other fees.
Talk to Your Providers
Because you won't have access to your account, you may not be able to pay your bills on time, including rent. Talk to your providers and explain your situation. See if they can temporarily lower your minimum payment or interest or, ideally, defer your payments. In some cases, as long as your provider knows the situation and you come up with a clear plan on when you can make the next payment, providers are lenient and don't charge anything in late fees. Don't wait to make these contacts, as failure to make payments dings your credit and damages the relationship you have with the provider.
Review the Seizure and Your State's Statute of Limitations
By law, in most states, credit card companies have to exercise due process before they seize your account. This means they need to tell you you're delinquent on the account, give you a chance to respond and notify you ahead of time that they are proceeding with a lawsuit for seizure. If you don't receive notice of the seizure, your credit card company may be acting illegally. Contact the court with any evidence you have that the credit card company didn't follow procedure with you.
In addition to due process law, credit card companies have to follow statute of limitations regulations. Typically debts expire after three to 15 years, depending on the debt type and the state in which you live. If your bank accounts were seized for a debt that has expired, take evidence showing the expiration to the court and try to have the seizure lifted.
Get a Prepaid Debit Card
Because you won't be able to access the account the credit card company seizes, you'll need a way to pay for items conveniently until the debt is settled -- some vendors don't accept checks anymore. Even if a vendor takes checks, you won't necessarily be able to use your checks to pay for what you need if they're connected to the seized account. You also don't want any cash you get from paychecks or other sources without protection from theft or loss. Putting your funds on a prepaid debit card solves these issues.
Review Your Finances and Negotiate
Your account, if justly seized, will remain frozen until you take care of your credit card bill. Review your finances and, if necessary, get debt counseling from a nonprofit agency to develop a budget that permits quick repayment. Refinance and consolidate as necessary and possible given your credit. During this process, contact the credit card company in writing and ask for a reduction in your interest rate, or make them an offer to settle the debt for less than what you owe. Because you want to pay off the debt as soon as possible, asking for a lower minimum payment isn't helpful in terms of getting the account back into action, as this usually means spreading out your debt repayment over a longer period.
0 comments:
Post a Comment