Your credit score drops when ready, your account goes to collections within months, and you can be sued for the debt
When you stop paying a credit card, the damage begins within 30 days. Your card issuer reports the missed payment to the three credit bureaus — Equifax, Experian, and TransUnion — and your credit score falls. The exact drop depends on your current score and payment history, but a single missed payment typically costs 100 points or more. After 90 days unpaid, the card issuer usually closes your account and sells the debt to a collection agency. After that, a collector can sue you in court, garnish your wages, or place a lien on your property, depending on your state's laws.
The timeline is not random. Card issuers follow a predictable sequence because federal law and their own policies require it. Understanding what happens at each stage — and what you can actually do to stop it — is the difference between a manageable problem and years of financial damage.
Key Takeaways
- A missed payment is reported to credit bureaus after 30 days, and your score begins falling when ready after that report.
- After 120 to 180 days unpaid, the card issuer typically closes your account and sells the debt to a collection agency.
- Collection agencies can sue you in court, and if they win, they can garnish your wages or place a lien on your home, depending on your state.
- Stopping payment does not erase the debt — it only changes who you owe and what tools they can use to collect.
- Contacting your card issuer before you miss a payment is the single most effective way to avoid the worst outcomes.
How your credit score is damaged in the first 90 days
Your credit score begins falling the moment your payment is 30 days late. The card issuer reports this to Equifax, Experian, and TransUnion, and the bureaus add it to your credit file. A 30-day late payment typically reduces your score by 100 to 150 points, depending on how high your score was before and how much of your available credit you are using.
The damage accelerates as time passes. A 60-day late payment is worse than a 30-day one. A 90-day late payment is worse still. By the time you reach 90 days unpaid, your score has usually fallen into the "poor" range — below 580 on most scoring models — even if you started with excellent credit. This affects your ability to borrow money, rent an apartment, or sometimes even get hired for certain jobs.
The late payment stays on your credit report for seven years from the date you first missed the payment. This does not mean your score stays damaged for seven years — it typically recovers over time if you pay your other bills on time — but the record itself does not disappear until the seven-year mark.
When the card issuer closes your account and sells the debt
Between 120 and 180 days unpaid — usually around the six-month mark — the card issuer stops trying to collect from you directly. Instead, they close your account and sell the debt to a third-party collection agency for a fraction of what you owe. This is called "charge-off." The card issuer writes off the debt as a loss on their books, but you still legally owe the money.
Charge-off is a major credit event. It appears on your credit report as a separate negative mark, separate from the late payments that came before it. A charge-off is worse than a late payment because it signals to future lenders that you abandoned the debt entirely rather than falling behind temporarily.
Once the debt is sold, the collection agency owns the right to collect it. They will contact you by phone, email, and mail. They may offer to settle the debt for less than the full amount — sometimes 30 to 60 percent of what you owe — because they bought the debt at a steep discount and any payment is profit. Whether to settle is a separate decision, but understand that settling does not erase the charge-off from your credit report.
How collection agencies can pursue you in court
A collection agency can file a lawsuit against you in civil court to recover the debt. If they win — and they win most cases because many people do not show up to court — the court issues a judgment against you. A judgment is a legal order saying you owe the money. It does not automatically take money from your account, but it gives the collection agency legal tools to do so.
With a judgment, a collection agency can garnish your wages, meaning they can order your employer to send a portion of your paycheck directly to them. The amount varies by state — some states allow garnishment of up to 25 percent of your disposable income, while others cap it lower. A few states, like Texas and South Carolina, have strong wage garnishment protections that make it harder for collectors to take your paycheck.
A collection agency can also place a lien on your home or other property. A lien is a legal claim against the property. If you sell the home or property, the lien holder gets paid from the sale proceeds before you do. A lien does not force you to sell, but it clouds the title and makes the property harder to refinance or transfer.
The collection agency must follow the Fair Debt Collection Practices Act, which prohibits harassment, threats, and contact before 8 a.m. or after 9 p.m. If they violate these rules, you can sue them and potentially recover damages. But the law does not erase the debt itself.
The statute of limitations: when collectors can no longer sue
Every state has a statute of limitations on debt collection lawsuits. This is a time limit after which a collector cannot sue you in court, even if you still owe the money. The limit varies by state and by the type of debt — for credit card debt, it typically ranges from three to six years from the date you last made a payment or last acknowledged the debt in writing.
This does not mean the debt disappears. You still owe it. But the collector loses the power to sue you and obtain a judgment. They can still contact you and ask for payment, and the debt still appears on your credit report (until seven years from the original missed payment). However, if they cannot sue, they cannot garnish your wages or place a lien.
The statute of limitations is state-specific, and some states have longer limits than others. If you are being sued, check your state's law or consult a local attorney to understand your timeline. Do not assume the debt is gone just because time has passed — confirm the statute of limitations in your state.
What you can do before you miss a payment
The best time to act is before you miss a payment. If you see that you cannot pay your full balance, contact your card issuer's customer service line and explain your situation. Many issuers offer hardship programs that lower your interest rate, reduce your monthly payment, or temporarily pause interest accrual. These programs are not advertised widely, but they exist, and issuers prefer them to charge-off because they recover more money.
To access a hardship program, you typically need to show that your hardship is temporary — a job loss, medical emergency, or income reduction — and that you have a plan to resume payments. Be honest about your timeline. If you can resume payments in three months, say so. If you need six months, say that instead.
If a hardship program is not available or does not help, consider whether you can pay even a small amount — $25 or $50 — before the 30-day mark. A partial payment does not reset the clock on the late payment, but it shows the issuer that you are trying, and it may make them more willing to work with you.
Options after you have missed payments
If you have already missed payments but have not yet been sued, you still have options. You can contact the collection agency and negotiate a settlement. Settlements are typically offered at 30 to 60 percent of the balance, and the collector may agree to remove the collection account from your credit report in exchange — though this is less common and should be requested in writing before you pay.
You can also hire a credit counselor or debt management company to negotiate on your behalf. Non-profit credit counseling agencies, often affiliated with the National Foundation for Credit Counseling, offer this service for a low fee or free. For-profit debt settlement companies charge higher fees and sometimes make promises they cannot keep, so research carefully before hiring one.
If you have been sued and a judgment has been entered, your options depend on your state's laws. Some states allow you to file a motion to vacate the judgment if you have a valid reason — such as that you were not properly served with the lawsuit. Others allow you to request a payment plan after judgment. Consult a local attorney if you are facing a judgment.
How long the damage lasts on your credit report
Late payments stay on your credit report for seven years from the date of the first missed payment. Charge-offs also stay for seven years from the date of charge-off. Collections accounts stay for seven years from the date the account was placed with the collection agency. After seven years, these negative marks fall off your report automatically, and your credit score begins to recover more quickly.
However, a judgment can stay on your credit report longer than seven years in some states. Some states allow judgments to remain for 10 years or more, and they can be renewed. Check your state's law to understand how long a judgment will affect your credit.
The impact of late payments and charge-offs on your score decreases over time, even before they fall off your report. A late payment from five years ago hurts your score far less than a late payment from last month. If you resume paying all your bills on time after stopping payment on a credit card, your score will gradually recover — typically reaching "fair" range (580–669) within two to three years, and "good" range (670–739) within four to five years, depending on your other credit activity.
Frequently Asked Questions
Can I be arrested for not paying a credit card?
No. Debt is a civil matter, not a criminal one. You cannot be jailed for owing money on a credit card. However, if you ignore a court judgment and fail to appear in court when ordered, you could face contempt of court charges, which can result in jail time. The key is responding to any lawsuit and showing up to court if you are sued.
Will the debt go away if I ignore it long enough?
The debt does not disappear, but the collector's right to sue you does expire after your state's statute of limitations — typically three to six years for credit card debt. After that, they cannot obtain a judgment, but they can still contact you and the debt remains on your credit report for seven years. Ignoring the debt does not erase it; it only delays consequences.
What is the difference between a charge-off and a collection account?
A charge-off is when your original card issuer writes off the debt as a loss. A collection account is when that debt is sold to a third party who then tries to collect it. Both appear on your credit report, and both damage your score. A collection account may appear even after the charge-off, because the collection agency reports it separately.
If I settle a debt with a collection agency, will it improve my credit score?
Settling removes the debt obligation, but it does not erase the negative marks from your credit report. The charge-off and collection account remain visible to future lenders. However, some lenders view a settled account more favorably than an unpaid one. Your score may improve slightly after settlement, but the improvement is usually modest compared to the damage already done.
Can I negotiate with my card issuer after they have sold the debt?
Once the debt is sold to a collection agency, your original card issuer no longer owns it and cannot negotiate on your behalf. You must negotiate with the collection agency. However, some collection agencies will sell the debt back to the original issuer if you contact the issuer and request it — this is rare but worth asking about if you have a long history with the card issuer.