What Happens If You Do Not Pay Credit Cards in California?

Contact creditors if you are unable to make your monthly credit card payment. Ideally, you should contact the company before you miss a payment. Generally, credit card companies will work with you to create a temporary payment plan. Unpaid debt will follow you, and creditors can sue, resulting in wage or bank garnishment and other collection options. California is a community property state, and your spouse may be equally liable for the debt.

Debt Collectors

If creditors cannot reach you or work out an equitable payment plan, a debt collection department or agency may be used. Debt collectors can and will call your home, family and possibly your employer in an attempt to locate you. However, debt collectors cannot harass you or use deceptive means to collect. Within five days of initial contact, debt collectors must provide you with the name of the original creditor, amounts owed and instructions on disputing the debt.

Initial Consequences

Credit card delinquencies result in increased interest rates, late fees and possible over-the-limit fines. As of 2010, credit card companies cannot raise your interest rate until you are more than 60 days late on payments. Your credit report will show late payments. Most accurate negative credit report information remains on your credit history for up to seven years, potentially limiting future lending options.

Lawsuits

When collection attempts fail, creditors may sue you for outstanding debt. Reply to a court summons within the instructed time frame. If you ignore the suit, you automatically lose the case. You may dispute the debt or otherwise defend yourself in the case. Additionally, California sets a statute of limitations of four years from the date of the last action on the account for lawsuits. If your last payment or usage of the card is beyond the four-year period, you may claim the statute of limitations as a defense in court.

Losing a Lawsuit

Creditors may garnishee wages, levy bank accounts and in some cases seize or place liens on property. As with the initial lawsuit, if you receive a court order concerning possible garnishment or seizure, contact the court within the instructed time frame. Some assets may be exempt from seizure, but you must request and claim these exemptions with the applicable court. Federal law protects most government benefits, welfare payments, Social Security compensation, veterans benefits and some retirement funds from garnishment for credit card debt.