Summary: Are you delinquent on your debt? Find out what you can do about it in this post.
Most creditors will declare your account the moment you miss a payment, you will also most likely get a grace period if you happen to forget or be a few days late. Despite this, you need to act quickly in order to avoid fees as well as damage to your credit score.
There are a few things you need to know about delinquent debt. First off, debt becomes delinquent the day after you first miss a payment. This does not necessarily mean that you are going straight into default, because there is often a grace period. The grace period is a window of time that you have to pay off missed payments and get everything back on track.
Despite this, lenders can begin to charge additional fees or penalties after being delinquent on a loan. This is the time where grace periods are going to be very important if you miss a payment. They vary according to the type of debt you have, so you need to look into the agreement you have with your lender. It is common to have a 30-day grace period for most debt except mortgages which are given 15 days before a late fee. (Mortgages usually have a 5% fee of whatever your monthly payment amount is.)
When it comes to a credit card, your late fee typically occurs very closely to after you miss a payment. Some lenders may give you a grace period up to when your next payment is due. The late fee ranges from $20 to $50, but you may also have an APR that could go as high as 30%.
Having a delinquent debt means that your credit score will most likely be lower as well. This will also make it more difficult and expensive to borrow money in the future. If you have a delinquent bill your score may drop by up to 80 points for a personal loan, 100 points for a student loan, and up to 125 points for a credit card payment.
Finally, a delinquent bill that you do not pay, will go into default. It will depend on the type of bill it is, as well as the lender. This should not be ignored because it will come back to bite you if not and get worse and worse.
Don't ignore debt collectors. Respond fast with SoloSuit.
Delinquency vs. default
Default is the end result that occurs after a delinquent debt has been left for a long period of time. It usually refers to missing multiple payments over various months, but the time period depends on what type of account it is.
For example, if you are delinquent on a mortgage or private student loan, it means you are 90 days late. Credit cards are considered delinquent at 180 days, while federal student loans are considered delinquent at 270 days.
What to do if you're delinquent on debt
Check your credit report. You can access all of your different credit reports from the credit bureaus. This will allow you to know which of your accounts is considered late and has been reported.
- Contact your lender. Before you miss a payment it is best to reach out to the lender or creditor who is in charge of your loan. This will possibly give you a chance to set up a payment plan and keep your account in good standing or get it back to where it was.
- Find a credit counselor. Credit counselors are financial professionals who are trained to help borrowers in serious debt. These people can help you make a budget, get you into a debt management course, and even sometimes help stop collection calls.
- Use your savings. Although it should be your last option if you have a retirement account or emergency fund you may want to dip into it. This can help you keep your credit high, and help avoid making the situation a lot worse. It is good to be aware that sometimes there are penalties, but when it comes to a Roth IRA you can withdraw contributions without paying taxes or penalties.
- Get a debt consolidation loan. If you are struggling to pay off multiple debts, then you may want to look into a debt consolidation loan. It is good to note that this will only work if you have good credit and a steady income. Debt consolidation loans can help you put all of your accounts into one payment with a lower interest rate. In some cases, the origination fees can be extremely high, so it is important that you look out for this before agreeing to it.
Protect your assets by responding to debt collectors with SoloSuit.
How to remove a delinquent account
Late payment notices and collection notices stay on your credit report for up to seven years. This is always after the original delinquency date. Despite this, as each year passes the impact on your score will change. Removing this delinquency is not easy, so the best thing to do is to avoid it before it happens. If this is not possible, you can ask your creditor for a goodwill adjustment if you have generally been in good standing.
For example, if your missed payment was due to something like a natural disaster or an accident. Another option is to make the repayment terms on a “pay to delete” basis. This would mean that if you pay it, they will take it off of your report. Despite this, the best way to fix your score and remove a delinquent account is to simply pay it off and budget better in the future.
What is SoloSuit?
SoloSuit makes it easy to respond to a debt collection lawsuit.
How it works: SoloSuit is a step-by-step web-app that asks you all the necessary questions to complete your answer. Upon completion, you can either print the completed forms and mail in the hard copies to the courts or you can pay SoloSuit to file it for you and to have an attorney review the document.
Respond with SoloSuit
"First time getting sued by a debt collector and I was searching all over YouTube and ran across SoloSuit, so I decided to buy their services with their attorney reviewed documentation which cost extra but it was well worth it! SoloSuit sent the documentation to the parties and to the court which saved me time from having to go to court and in a few weeks the case got dismissed!" – James
>>Read the FastCompany article: Debt Lawsuits Are Complicated: This Website Makes Them Simpler To Navigate
>>Read the NPR story on SoloSuit: A Student Solution To Give Utah Debtors A Fighting Chance
How to answer a summons for debt collection in your state
Here's a list of guides for other states.
All 50 states.
Guides on how to beat every debt collector
Being sued by a different debt collector? We're making guides on how to beat each one.
Win against credit card companies
Is your credit card company suing you? Learn how you can beat each one.
Going to Court for Credit Card Debt — Key Tips
How to Negotiate Credit Card Debts
How to Settle a Credit Card Debt Lawsuit — Ultimate Guide
Get answers to these FAQs
Need more info on statutes of limitations? Read our 50-state guide.
Why do debt collectors block their phone numbers?
How long do debt collectors take to respond to debt validation letters?
What are the biggest debt collector companies in the US?
Is Zombie Debt Still a Problem in 2019?
If a car is repossessed, do I still owe the debt?
Is Portfolio Recovery Associates Legit?
Is There a Judgment Against Me Without my Knowledge?
Should I File Bankruptcy Before or After a Judgment?
What is a default judgment?— What do I do?
Summoned to Court for Medical Bills — What Do I Do?
What Happens If Someone Sues You and You Have No Money?
What Happens If You Never Answer Debt Collectors?
What Happens When a Debt Is Sold to a Collection Agency
What is a Stipulated Judgment?
What is the Deadline for a Defendant's Answer to Avoid a Default Judgment?
Can a Judgement Creditor Take my Car?
Can I Settle a Debt After Being Served?
Can I Stop Wage Garnishment?
Can You Appeal a Default Judgement?
Do I Need a Debt Collection Defense Attorney?
Do I Need a Payday Loans Lawyer?
Do student loans go away after 7 years? — Student Loan Debt Guide
Am I Responsible for My Spouse's Medical Debt?
Should I Marry Someone With Debt?
Can a Debt Collector Leave a Voicemail?
How Does Debt Assignment Work?
What Happens If a Defendant Does Not Pay a Judgment?
How Does Debt Assignment Work?
Can You Serve Someone with a Collections Lawsuit at Their Work?
What Is a Warrant in Debt?
How Many Times Can a Judgment be Renewed in Oklahoma?
Can an Eviction Be Reversed?
Does Debt Consolidation Have Risks?
What Happens If You Avoid Getting Served Court Papers?
Does Student Debt Die With You?
Can Debt Collectors Call You at Work in Texas?
How Much Do You Have to Be in Debt to File for Chapter 7?
What Is the Statute of Limitations on Debt in Washington?
How Long Does a Judgment Last?
Can Private Disability Payments Be Garnished?
Can Debt Collectors Call From Local Numbers?
Does the Fair Credit Reporting Act Work in Florida?
The Truth: Should You Never Pay a Debt Collection Agency?
Should You Communicate with a Debt Collector in Writing or by Telephone?
Do I Need a Debt Negotiator?
What Happens After a Motion for Default Is Filed?
Can a Process Server Leave a Summons Taped to My Door?
Learn More With These Additional Resources:
Need help managing your finances? Check out these resources.
How to Make a Debt Validation Letter - The Ultimate Guide
How to Make a Motion to Compel Arbitration Without an Attorney
How to Stop Wage Garnishment — Everything You Need to Know
How to File an FDCPA Complaint Against Your Debt Collector (Ultimate Guide)
Defending Yourself in Court Against a Debt Collector
Tips on you can to file an FDCPA lawsuit against a debt collection agency
Advice on how to answer a summons for debt collection.
Effective strategies for how to get back on track after a debt lawsuit
New Hampshire Statute of Limitations on Debt
Sample Cease and Desist Letter Against Debt Collectors
The Ultimate Guide to Responding to a Debt Collection Lawsuit in Utah
West Virginia Statute of Limitations on Debt
What debt collectors cannot do — FDCPA explained
Defending Yourself in Court Against Debt Collector
How to Liquidate Debt
Arkansas Statute of Limitations on Debt
You're Drowning in Debt — Here's How to Swim
Help! I'm Being Sued by My Debt Collector
How to Make a Motion to Vacate Judgment
How to Answer Summons for Debt Collection in Vermont
North Dakota Statute of Limitations on Debt
ClearPoint Debt Management Review
Indiana Statute of Limitations on Debt
Oregon Eviction Laws - What They Say
CuraDebt Debt Settlement Review
How to Write a Re-Aging Debt Letter
How to Appear in Court by Phone
How to Use the Doctrine of Unclean Hands
Debt Consolidation in Eugene, Oregon
Summoned to Court for Medical Bills? What to Do Next
How to Make a Debt Settlement Agreement
Received a 3-Day Eviction Notice? Here's What to Do
How to Answer a Lawsuit for Debt Collection
Tips for Leaving the Country With Unpaid Credit Card Debt
Kansas Statute of Limitations on Debt Collection
How to File in Small Claims Court in Iowa
How to File a Civil Answer in Kings County Supreme Court
Roseland Associates Debt Consolidation Review
How to Stop a Garnishment
Debt Eraser Review
Do Debt Collectors Ever Give Up?
Can They Garnish Your Wages for Credit Card Debt?
How Often Do Credit Card Companies Sue for Non-Payment?
How Long Does a Judgement Last?
How Long Before a Creditor Can Garnish Wages?
How to Beat a Bill Collector in Court