What Happens if You Don't Pay Credit Card Debts in Kentucky?

Failing to pay credit card debts in any state is a fairly serious matter. Just like in the rest of the states, those who don't pay a credit card debt in Kentucky will see their credit score downgraded by the major credit rating bureaus. Credit card companies in Kentucky can also bring court proceedings to collect a debt and garnish -- have employers withhold -- wages if necessary. Depending on the size of the debt, bankruptcy may be the only viable path to escape the pursuit of creditors.

Credit Rating

The most immediate consequence of failing to pay credit card debts in Kentucky is the damage a late or missed payment can do to your credit rating. Usually, credit bureaus will lower your credit score when you miss a payment, pay less than the minimum or pay late. Making a payment only a couple days late may not hurt your credit score, but can still result in higher interest rates, finance charges and late fees from the credit card company.

Small Claims Court

If you don't pay a credit card debt for several months, it is likely your bill will be sent to collections. In addition to frequent phone calls and letters from the credit card company, the card issuer might also choose to pursue a claim in court. This is true both for large and small debts. Most smaller credit card debts in Kentucky are handled in the Kentucky small claims court. Typically, proceedings in Kentucky's small claims courts are informal and do not require professional legal representation.

Wage Garnishment

Depending on the results of court proceedings, a credit card company may be able to garnish your wages to collect a credit card debt. This is a legal order by which your employer withholds pay to collect on a debt. The court determines the amount allowed to be garnished based on income levels and the size of the debt. As of August 2009, courts can only garnish the wages of individuals who make more than $217.50 per week.

Bankruptcy

If a credit card debt cannot be paid through garnishment or a repayment plan, it may be necessary to file for bankruptcy. While a person cannot be declared bankrupt, those without the means to make garnishment payments are usually forced to file for bankruptcy. Bankruptcy is a legal process that allows the court to liquidate or repossess assets in order to pay creditors. Under Kentucky law, some assets are considered "exempt" from bankruptcy, such as your home, car (up to $3,225) and child support payments. Bankruptcy also may result in the court eliminating debts that are determined to be uncollectable.