The Effects of Late Payments

Many people live their lives paycheck to paycheck with very little opportunity to save or even to consider where the money is going. If they miss one or two hours of work, their entire budget for the month will be messed up. While many may scrimp on eating out or cut some other discretionary spending to make up the difference, others will choose not to pay a bill precisely on time. This may get a person through the month unscathed but can have severe negative repercussions later on.

Making late payments consistently will have a negative effect on a person’s credit score. Every time a person applies for a loan, mortgage, or even insurance, a credit score is used to determine, in part, whether that person is a worthy investment for the company. Unfortunately, making late payments will depress a person’s credit score making it less likely that the couple or individual will be eligible for the best loan terms, or even a loan at all.

On credit cards that maintain a balance, a person will be charged a much greater interest rate if he or she doesn’t pay on time consistently. While the starting balance may be between 0% and 5%, making late payments can have the interest rate jump to some number upwards of 20%. That is a significant interest amount and makes getting out from under credit card debt even more difficult. Making payments on time, on the other hand, will keep rates low and potentially even eliminate late fees all together.

Contact a Boston Bankruptcy Lawyer

If you have found yourself under a mountain of debt with no way of getting out from under it, contact a Boston bankruptcy lawyer from Joshua Spirn & Associates at 800-975-5346 to discuss your financial situation and to determine if bankruptcy is the best option for you.