If I stopped paying my credit debt what would the outcome be?
To be honest the outlook would be bleak.
you will get letters from the lender asking why you havent paid, possibly phone calls too.
as each month passes your credit rating will deteriorate making it difficult to secure credit in the future - this can even knock on to car and home insurance as more insurers are credit referencing people now if you want to pay monthly.
eventually the lender will take court proceedings but it has been known in the past for unsecured lenders (such as a credit card company) to be able to enforce the sale of your home to recover debt.
really, your best advice is to speak to your lender to see if they can help you.
poor credit can follow you indefinitely and if bankruptcy were to occur, forever, as discharged bankrupts must always declare themselves to new prospective lenders. | 12.22.10 @ 22:53
Darren is absolutely right. The damage you could cause yourself would be startling and long-term, with your prospects of obtaining future credit reduced (perhaps to zero) and your prospects of obtaining a mortgage or a remortgage also very limited. Future credit and mortgages would, if available at all, also cost you more.
Even if you think you have a case against the credit company or another supplier (notably mobile phone operators, which are notorious for causing people to have defaults recorded against them), and feel that you don't owe them anything, my firm advice is to keep on paying, so that you don't enter a 'default' situation (where a payment is not made before the next one is due) or have county court judgements against you. Tackle the dispute separately and take legal advice if necessary rather than embarking on such a dangerous course of action.
On the other hand, you may have no choice because you just don't have enough to pay your debts. Communicate at an early stage with those you owe, and make use of the free debt management advice provided by the Citizens Advice Bureaux. An agreed and properly run debt management programme will substantially limit the damage to your creditworthiness. | 12.24.10 @ 12:09