Nothing compares to being able to pay off all your debts wholly. Financial freedom! As you grow older, you will realise that being financially free is much more significant than any other material thing. It gives you a secured amount of savings, financial investments, and a limitless quantity of cash. You can even afford the kind of life you desire and deserve. If you are having trouble with being unable to pay your credit card debt in Singapore, settle it as early as possible to acquire your financial freedom.
In life, there are really unforeseen and unfortunate events that happen to people, such as emergencies, natural disasters, or health conditions. These circumstances consume a person’s finances to the point that they run out of savings. However, debt most often gets piled up because of uncontrolled spending habits. Credit cards are relatively helpful if used properly. It can lend you a hand during cashless days. If you’re planning to enrol on a credit account, ensure to have a debt management plan in Singapore.
Pay off and settle your debts, even little by little. Unsettled and unpaid debts may bring you to Magistrate Court, or worse, in the High Court.
WHAT IF YOU’RE UNABLE TO PAY YOUR CREDIT CARD DEBT IN SINGAPORE?
The banks and debtor agencies would not tell you about this, but what if you cannot really afford to pay? Should you panic? Will you be put behind bars? Here is a realistic view of what may or may not happen for being unable to pay your credit card debt in Singapore.
Your credit history and score will be affected.
Typically, when you miss a payment, or even just one day after the due date, it will affect your credit score. Being unable to pay your credit card debt in Singapore on time can make you lose more or less a hundred points in your credit score. At first, it will not do that much damage. But once it happens frequently, it will generate higher interest rates, which results in substantial financial costs. Moreover, the bank will gradually lose their trust in you and your account. That is why paying on time and regularly updating your debt records are necessary.
Your debt will go to a collection agency.
Generally, banks have an authorised debt collector. But sometimes, they hire debt collection agencies to help gather debts from several people who owe money to the bank. The primary reason why you should always contact your bank before due dates are for updates and extensions. Most banks, especially if you have an outstanding credit score, would give you a 30-day extension if you are still unable to pay your credit card debt in Singaporeon the given due date. Make it a habit to update the bank if you cannot pay on time.
Expect numerous calls, messages, and untold visitations from debt collectors.
If you cannot pay after the given period, the bank will send your account to a debt collection agency. The agency has assigned a debt collector for you. Since they have your account, they have all your personal details, too. Keep that in mind. After the given 30-day period, they will eventually send you text messages, emails, and letters of notice. They will also ring your phone multiple times for the second collection phase. If they still cannot get in touch with you, they will go to your address in a campaign to get you to pay what you owe them. That is why a financial consultant and a debt management plan in Singapore are essential.
Scheduled court proceedings may occur through a court order.
Going back to the question earlier, will you be put behind bars? It depends. If you are still unable to pay your owed credit card debt in Singapore, the debt agency can file a lawsuit against you to settle your payment. Their lawyer will file a complaint to the State Courts. Once it gets approved, you will receive a court order or subpoena that states a scheduled court proceeding.
The legal procedures for settling debts in Singapore are as follow:
- For debts of S$10,000 or less, the debt collection agency can file a complaint. The hearing will take place in the Small Claim Tribunal.
- For debts S$60,000 or less, the Magistrate Court will handle and settle the petition between you and the debt collection agency.
- For debts between S$60,000 to S$250,000, District Courts will administer the petition.
- For debts higher than S$250,000, higher authorities and judges will handle the case. The court proceedings will happen in the High Court.
Your debt will probably haunt you for years.
Remember, each action equals a consequence. The same applies to debts. Each purchase using your credit card equals your pile of debt. Whether paid or not, what may happen will haunt you for years. The challenges of being unable to pay your credit card debt in Singapore are daunting and terrifying. Being on the hook for the money you owe may ruin your credit score. It can also destroy your life, financial stability, and reputation. Are you still planning to get a credit card? Having a debt management plan in Singapore is a helpful decision.
Once you have finally gotten out from all of your debts, it is crucial to keep track of all proof that all debts are completely paid and take spending measures now. If you are still in the process of gradually paying, you may check for debt consolidation plans in Singapore to help you pay faster. Debts and credit cards are a responsibility. If you do not use it wisely, expect future financial damage and complicated life problems. Again, keep in mind that each time you spend equals debt.
Ready to bank some knowledge on credit cards and the best debt consolidation plan in Singapore? At Debt Aid, they can fully assist you and answer your queries instantly. Visit their website to get in touch with a professional team.