Remember that credit card bill you stopped paying a few months ago? Before posting on your favorite social network website that you just got a raise, or that you’re going to Tahiti, think twice. Bill collectors are now using social media to track down customers who aren’t paying. A spokesman for ACA International, a debt collection trade organization, notes that social media has become another resource for debt collection companies. Although not common right now, the use of social media to collect bad debts is expected to expand. Understanding what happens when you don’t pay credit card debt and other bills can help you avoid problems with debt collectors that seemingly stop at nothing to collect unpaid debt.

Credit card debt may be charged off, but it doesn’t go away

Credit card companies are in the business of making loans through issuing credit cards, and once they determine a debt is unlikely to be paid, it’s removed from active accounts. This is a process known as charging off bad debt, but the story doesn’t end there. Financial institutions, credit card companies, and other creditors typically sell their bad debt for pennies on the dollar to “boiler room” collection agencies. Collection agents may work on commission, and their job security depends on meeting goals for collecting debt. Although federal laws govern the practices of debt collectors, they can be relentless. They keep after you until you either pay or file bankruptcy, which stops all collection activity for creditors included in your bankruptcy filing.

Debt consolidation and credit counseling: Calming the wolf and restoring sanity

Ignoring debt doesn’t work. You are slammed with phone calls, snail mail, email, and eventually, someone may visit you at home or work and serve you with a summons. This is generally the first step creditors take toward getting a court order to garnish your wages or levy your bank accounts. Let’s not go there because debt help is available. Take stock of your debts and contact a credit card debt consolidation service, also called a consumer credit counseling agency. These services work with you and your creditors to establish an affordable repayment plan and cash-based budget. You pay a fee for this service, but not until you agree to accept help. You are also required to close your credit lines, but this is a small price to pay for gaining peace of mind and restoring sanity to your household and finances.

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