What Happens If I Don't Pay My Credit Card Debts?

Do you have any unpaid credit card, and you are bothered if this will hit your NBI clearance? In this article, we will try to answer that question.

Although having a credit card is always a better idea than cash payment as it offers various services to the users, it must be used sensibly.

Credit cards offer you to make purchases before paying the balance back with or without interest. They help to purchase expensive items that can’t be paid at once, like iPhones, vehicles, etc. Most of the time, banks offer their users monthly installments without interest.

Besides all the features of a credit card, Filipinos must not go overboard with one’s purchases.

What happens to unpaid credit cards??

The answer depends upon a variety of factors that affect your credit card history.

Initially, if you have been late in paying your credit card bill, get ready for higher interest rates for the purchases. Bank will commence charging penalties against you.

If you are still unable to pay your credit card bills, the bank will issue you a demand notice urging to pay your dues.

What happens if I still don’t pay heed to the bank’s notice?

If you still don’t pay the debts, the bank can file a civil case against you because you did not value the demand notice. It is mandatory for the creditor bank to present the demand notice; otherwise, the civil case will be dismissed.

After filing a case, your debt will be sold to a collection agency, and that is the worst part.

What will the collection agency do of my card?

As soon as the collection agency takes hold of your debt, you become notorious in credit bureaus’ eyes. This is destructive to your credit history as it remains stuck on your report for a minimum of seven years.

Collection agencies are way strict than the credit card issuers in retrieving the amount of debt. They will make you pay for the full amount of debt without any concession.

What may be the legal actions if I never pay my debts?

If you never pay your debt, the collection agencies will use all the legal means to retrieve the amount. This includes consecutive hearings in the court against you.

Should I attend the judgment when I’m still unable to pay my debt?

If you have been entangled in such a miserable situation, the best way to opt is to fight rather than flight. You must go to the court for hearings and sketch the options left for you.

If you miss the court judgment, it is likely for you to lose the case. In this case, the situation will get even worse. You will be forced to pay the amount of debt. It could occur in the court-approved decision of account garnishment. You may have your assets drowned to pay the required amount of debt.

Making a long story short, ignoring the court’s call can ruin your mental peace. So, it is always a good idea to answer all the hearings.

Can I be imprisoned for not paying the debts?

As per section 20 of Article 3 of the Philippine constitution, it states that
“No person shall be imprisoned for debt or non-payment of a poll tax. But the creditors can still bring you to the court to demand and enforce the payment of your debt”

Additionally, in case you gave cheques to reimburse your obligations, you will be dependent upon Batas Pambansa (B.P.) 22, which is a law that punishes the creation or drawing and issuance of a cheque without adequate assets or credit and for different purposes.

B.P. 22 punishes “any person who makes or draws and issues any cheque to apply on account or for value, knowing at the time of issue that he does not have sufficient funds in or credit with the drawee bank for the payment of such check in full upon its presentment, which cheque is subsequently dishonored by the drawee bank for insufficiency of funds or credit or would have been dishonored for the same reason had not the drawer, without any valid reason, ordered the bank to stop payment.”


What is the option left if I have lost the case filed against me?

If you are ruled against in the judgment and still cannot find the way to pay your debt, the best option is to file for bankruptcy. It’s the legal way to say that you are left with no other way to pay back your debt.

Types of bankruptcy available:

  • Chapter 7 of bankruptcy requires the dissolution of non-exempt assets of the individual to pay back the debts. It means you may lose your car, house, or your valuable personal assets that may contribute to pay off your debt.
  • Chapter 13 of bankruptcy permits you to sketch a possible strategy to pay off the amount of debt within a reasonable time issued, usually three to five years, after which you are supposed to make payments to a third-party trustee who will, in turn, pay your debt collectors.

Chapter 13 is a preferred option available as it conserves your assets from being drowned. It is valid for individuals who have regular earning.

What is the key to avoid such aggressive exposure while dealing with credit cards?

The only way to avoid such an aggressive attitude of the creditor banks is to develop a sense of financial responsibility. Thus, paying your credit card bills on time is a must.

Does NBI clearance hits unpaid credit card?

Although a civil case is filed against you, the NBI clearance will not check unpaid credit cards as it only covers criminal cases.

Final thoughts

If you have unpaid credit debts right now, please remember to never dodge your bank as you don’t know when you may need financial assistance from them in the future.


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