Maintaining a credit card can be a lot of hard work. A person has to monitor their spending, keep track of their bills, meet the minimum payment every month, and be timely with payments. However, some people may fall behind on their payments. This is called delinquency.
Making a delinquent payment simply means that a person was unable to pay their monthly credit card bill on time. The Federal Deposit Insurance Corporation has stated that delinquent payments do not hit the minimum amount that is due. It is also possible for delinquent payments to stack, which is a big concern for many spenders. If delinquency begins to stack, then the consequences for delinquency will also stack. In the long run, this can severely damage a person’s credit score. For example, credit scores will remain unaffected within the first 29 days of a delinquent payment. As long as a person is able to pay off their bill within that span of time, they will be safe from the damages of a lowered credit score.
However, the credit bureau will be notified if 30-59 days have passed without any payment from the delinquent card holder. A person may lose up to 125 points for going 60-89 days without paying off their bill. The number of points docked from a credit score increases until 180 days have passed. At that point, the card holder’s account is considered “charged-off”. Damage like that is incredibly difficult to recover from. At that point, a card holder may need to consider filing for bankruptcy.
Despite how intimidating it can be to deal with credit cards and potential credit debt, bankruptcy is still a viable option. While it may not be the perfect option for everyone, it can still be kept on the table for consideration.