Editorial Policy

Pay what's owed on credit card before troubles mount

Erica Sandberg

December 22, 2015

QHi Erica,

Mommy brain here! Had twins four months ago and everything is crazy. I'm not sleeping too much, but I was doing good till I forgot to pay my Wells Fargo credit card and now it is three months behind! I didn't even use it for a year — it's an old bill that I was paying off from before. Anyway, I got late charges on it, too. This is my personal account, so it won't affect my husband‘s credit, right? What can happen to me? Thanks for your help on this. — Libby

ADear Libby,

I can't imagine the exhaustion you're experiencing, and I'm sure having twins has impacted various aspects of your life. Keeping up with even important financial matters may slide by the wayside when remaining awake requires all your effort!

While bad, you're not in a terrible position with your credit card company yet. However, you must act quickly. That Wells Fargo bill is getting old and you don't want the bank to charge it off, which probably will happen if you don't pay it off soon (180 days is the typical cutoff point). At that stage, the bank may sell the unpaid account to a collection agency. Trust me, you don't want to deal with collectors at any time, but especially when you're caring for two infants. Ask Erica

But that's not all. A creditor also can sue you for any unpaid debt. This would be even worse than dealing with third-party collectors, because the bank will likely win the case, leaving you with a judgment. Not only would it hurt your credit rating, but the amount of the debt would be far higher than what it is today because legal fees and interest would be added. In a judgment, creditors have a few methods to get what's owed,  one of which is a wage garnishment. Though you're probably not working outside the home now, you may be in the future, and that's not how you'd like to start off with an employer.

So those are the warnings. Here is  what you can do:

Figure out how much money you have at your disposal that you can send to Wells Fargo. Ideally it will be enough to cover all the back payments and then some. After that, get on the phone and speak with a representative. Explain what happened (pregnancy, babies…) and that you want to make things right. Ask for the late fees to be waived. If you've been a good customer in the past, the bank may be willing to give you a break, at least on one or two of the charges.

Evidence that the bill is at least 90 days behind is showing up on your consumer credit reports, and definitely doing damage to your credit scores. So while you're on the phone, ask if your large payment will be sufficient to re-age the account. Re-aging is when the credit issuer erases past delinquency notations from your credit reports. It is under no legal obligation to do so, so if the person tells you that this is not possible, let it go. Even with a good excuse, the fact remains that you did not pay the debt as agreed.

The good news is that you can get back on track by making your payments on time from this point forward. Set up automatic bill pay with Wells Fargo to ease the pressure on your mommy brain.

As for your husband, his credit report is and will be protected from damage because this account is in your name only.

Got a question for Erica? Send her an email.

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