Debt Delinquency Timeline: What To Expect Bankrate.com Caret RightMain Menu Mortgage Mortgages Financing a home purchase Refinancing your existing loan Finding the right lender Additional Resources Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Bank Banking Compare Accounts Use calculators Get advice Bank reviews Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Credit Card Credit cards Compare by category Compare by credit needed Compare by issuer Get advice Looking for the perfect credit card? Narrow your search with CardMatch Caret RightMain Menu Loan Loans Personal Loans Student Loans Auto Loans Loan calculators Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Invest Investing Best of Brokerages and robo-advisors Learn the basics Additional resources Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Home Equity Home equity Get the best rates Lender reviews Use calculators Knowledge base Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Loan Home Improvement Real estate Selling a home Buying a home Finding the right agent Additional resources Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Insurance Insurance Car insurance Homeowners insurance Other insurance Company reviews Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Retirement Retirement Retirement plans & accounts Learn the basics Retirement calculators Additional resources Elevate your Bankrate experience Get insider access to our best financial tools and content Advertiser Disclosure
Advertiser Disclosure
We are an independent, advertising-supported comparison service. Our goal is to help you make smarter financial decisions by providing you with interactive tools and financial calculators, publishing original and objective content, by enabling you to conduct research and compare information for free - so that you can make financial decisions with confidence.
Bankrate has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Make Money
The offers that appear on this site are from companies that compensate us. This compensation may impact how and where products appear on this site, including, for example, the order in which they may appear within the listing categories. But this compensation does not influence the information we publish, or the reviews that you see on this site. We do not include the universe of companies or financial offers that may be available to you. SHARE: Cathy Scola/Getty Images June 24, 2022 Libby Wells covers banking and deposit products. She has more than 30 years’ experience as a writer and editor for newspapers, magazines and online publications. Aylea Wilkins is an editor specializing in personal and home equity loans. She has previously worked for Bankrate editing content about auto, home and life insurance. She has been editing professionally for nearly a decade in a variety of fields with a primary focus on helping people make financial and purchasing decisions with confidence by providing clear and unbiased information. Bankrate logo The Bankrate promise
At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict editorial integrity, this post may contain references to products from our partners. Here's an explanation for how we make money. Bankrate logo The Bankrate promise
Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next. Bankrate follows a strict , so you can trust that we’re putting your interests first. All of our content is authored by and edited by , who ensure everything we publish is objective, accurate and trustworthy. Our banking reporters and editors focus on the points consumers care about most — the best banks, latest rates, different types of accounts, money-saving tips and more — so you can feel confident as you’re managing your money. Bankrate logo Editorial integrity
Bankrate follows a strict , so you can trust that we’re putting your interests first. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. Key Principles
We value your trust. Our mission is to provide readers with accurate and unbiased information, and we have editorial standards in place to ensure that happens. Our editors and reporters thoroughly fact-check editorial content to ensure the information you’re reading is accurate. We maintain a firewall between our advertisers and our editorial team. Our editorial team does not receive direct compensation from our advertisers. Editorial Independence
Bankrate’s editorial team writes on behalf of YOU – the reader. Our goal is to give you the best advice to help you make smart personal finance decisions. We follow strict guidelines to ensure that our editorial content is not influenced by advertisers. Our editorial team receives no direct compensation from advertisers, and our content is thoroughly fact-checked to ensure accuracy. So, whether you’re reading an article or a review, you can trust that you’re getting credible and dependable information. Bankrate logo How we make money
You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey. Bankrate follows a strict , so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers. We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service. Any bill that is reported to a credit bureau as past due is a delinquent debt. In the early stages of delinquency, it’s easier to repair your credit and move on. But the longer debts go unpaid, the more aggressive creditors get about collecting what’s owed, and you may find it more challenging to qualify for the best interest rates on other debt products you apply for. There’s also a chance you’ll get passed over for a job, rejected for an apartment or assessed higher auto insurance premiums. Fortunately, you can take action to resolve delinquent debts and start restoring your credit health sooner than later. Stage 1 30 days past due
At 30 days past due, the lender will send you a written reminder that you have not made your payment. If you have an excellent payment history, the lender may cut you some slack and choose not to report it to the credit bureaus. You’ll probably incur a late fee, though. “Late payments can start harming your credit score as soon as they are reported, but you get a 29-day grace period,” said John Ulzheimer, a credit expert, author and educator who worked for Equifax and credit-scoring service FICO. “Most lenders report as soon as you’re 30 days late, but that’s not a requirement.” Your options
Get in touch with your lender beforehand if you know you’re going to miss a payment. “Communication is key,” says Bruce McClary, spokesman for the National Foundation for Credit Counseling (NFCC). “You should be bringing the account up to date or reaching out to the creditor to identify alternatives for resolving the issue.” Ask the lender for a payment arrangement. Lenders are more likely to work with you if you reach out first and communicate that you’re experiencing financial hardship. Stage 2 60 days past due
The lender will communicate with a greater sense of urgency and be clear about the negative consequences of failing to bring the account up to date. You’ll be charged more penalties and late fees and your credit score will drop further. If you’re missing mortgage payments, you’re still at a point where the lender is likely to work with you to help get your account current. Your options
Attempt to bring the account current. The stakes are higher now. But it’s not too late to get caught up without trashing your credit. If you pay what you owe, your credit card lender may continue to let you use the card, says McClary. Call your lender promptly if you haven’t already reached out. Explain your situation and try to work out a payment arrangement. “The longer you wait, the costlier it becomes to work around these challenges,” says McClary. “At this stage, you’re faced with tougher choices. Your window of opportunity is closing.” Stage 3 90 days past due
At this stage, the lender is close to declaring your account uncollectible, which is known as a “charge-off.” Credit card lenders may send your account to a third-party debt collector. “A 90-day delinquency is considered to be a major derogatory in both the FICO and VantageScore credit-scoring systems,” says Ulzheimer. “Once you pass 60 days past due the impact is more significant and long-lasting.” Your options
Negotiate a payment plan. There is a chance you can reactivate your account by setting up a payment plan with the creditor, McClary says. If you have a hardship, your creditor may agree to reduced payments or a lower interest rate. Work with a nonprofit counseling agency. The , or one of its member agencies, can help you manage and pay off your debt. A credit counselor helps you devise a payoff plan, which requires you to close out your accounts and make a monthly payment to the counseling agency, which pays the creditors. Consider enrolling in a debt management plan. “The debt management plan gives you access to lower interest rates, reduced payments,” McClary says. “It halts the fees and you pay off your debts in a fraction of the time it would take otherwise.” The typical debt management plan takes three to five years to complete, McClary says. Another plus: counseling agencies may work for little to no cost, depending on your circumstances. Stage 4 120-180 days past due
A creditor will declare your account as a charge-off once you are four months or more past due. “Your credit score will tank when it’s listed as a charge-off,” says McClary. “A creditor may have a path toward filing a judgment against you. Some states have the option to garnish your paycheck.” The creditor may sell the account or let a third-party debt collector take over recovery efforts. “Now you are dealing with a person who wants the full balance,” says McClary. Debt collectors will call you and send you letters and emails. They are bound by the federal , which prohibits them from using unfair, deceptive and abusive collection tactics. Third-party debt collectors sometimes sell off debt to another debt collector if they haven’t been successful in getting you to pay. Make sure the debt shows up as the same account on your credit report. Sometimes it may look like another delinquent account, and you’ll want to dispute any duplicates. Know that any payment you make to a third-party debt collector can restart the statute of limitations on your debt. If you’re still missing mortgage payments, the foreclosure process could get underway. Foreclosure laws vary by state, but generally, after the fourth missed payment, you receive a default notice and are given a window of time to pay up before the lender starts taking steps to claim your house. Your options
Get verification of the debt from the third-party collector. Confirm the collector’s identity with the original creditor. Establish a payment plan or offer a settlement. The creditor or debt collector probably won’t settle for less than half the balance. “But shoot for the moon on your first offer because you never know,” advises McClary. Be sure to get the settlement offer in writing with a clause that states the collector or creditor won’t sue you if you make the payments. When a settlement is paid in full, make sure your credit report reflects that. Set your communication preferences with the debt collector.“You have the right to tell them to stop calling you at work, for example, but don’t shut down the lines of communication,” McClary says. “You want to know where they are in the process. Leave them the option to contact you by mail or email.” Research the laws that are applicable to you. States have their own laws pertaining to the statute of limitations on debt collection, wage garnishment and seizure of assets. Court proceedings
If a third-party debt collector has been unable to contact you, it can take you to court. If the debt collector or creditor receives a judgment against you, it may be able to garnish your wages or seize assets to satisfy the debt. Your options
Show up for your court hearing if you receive a summons. There, you can dispute the debt. Otherwise, it’s an automatic win for the collector. If you live in a state with a judicial foreclosure system, your mortgage default will end up in court. If the court forecloses, your home will be sold at auction to the highest qualifying bidder and that money will go to the lender. Understand credit reporting timelines. All information on your delinquent account will remain on your credit report for seven years. That can sound like forever, but Rod Griffin, director of public education at Experian, one of the three major credit-reporting bureaus, tells consumers with delinquent debt and bad credit to stay positive. Begin restoring your credit health. “Start small and work your way up. Get your credit report and know what’s in it. It’s a credit history, but it is a history you can change. You can absolutely restore your credit history,” says Griffin, noting that tools like Experian Boost can help consumers improve their credit score by giving them a bump for on-time mobile phone and utility payments. “In the end, lenders don’t want to take your house or repossess your car,” Griffin says. “They want you to fulfill those terms and have a good relationship with you. (Delinquency) is costly and time-consuming for them too.” Learn more
SHARE: Libby Wells covers banking and deposit products. She has more than 30 years’ experience as a writer and editor for newspapers, magazines and online publications. Aylea Wilkins is an editor specializing in personal and home equity loans. She has previously worked for Bankrate editing content about auto, home and life insurance. She has been editing professionally for nearly a decade in a variety of fields with a primary focus on helping people make financial and purchasing decisions with confidence by providing clear and unbiased information. Related Articles