Your account goes to collections, your credit score drops, and the card issuer can sue you for the debt

When you stop paying a credit card, the issuer marks your account delinquent after 30 days of missed payments. After 180 days (roughly six months) of non-payment, the card company typically writes off the debt and sells it to a debt collection agency. During this time, your credit score falls sharply—often by 100 points or more—and collection calls and letters begin. The card issuer can also file a lawsuit against you to recover the money, which may result in a judgment that lets them garnish your wages or freeze your bank account, depending on your state's laws.

The damage does not stop after the debt is sold. A collection account stays on your credit report for seven years from the date you first missed a payment, making it harder to borrow money, rent an apartment, or sometimes even get hired for certain jobs. Even after you pay the debt, the collection account remains visible on your report, though paid collections have less impact than unpaid ones.

Key Takeaways

  • Your account becomes delinquent at 30 days past due, and the card issuer reports this to credit bureaus, damaging your credit score immediately.
  • After 180 days of non-payment, the card company typically sells the debt to a collection agency, which then pursues you for payment.
  • The card issuer can file a lawsuit and obtain a judgment that allows wage garnishment or bank account freezes in most states.
  • A collection account remains on your credit report for seven years, even if you eventually pay it, affecting your ability to borrow or rent.
  • Interest and late fees continue to accumulate on the unpaid balance, sometimes doubling or tripling the original debt.

How the delinquency timeline works

The first 30 days are critical. Once you miss a payment, the card issuer reports the delinquency to the three major credit bureaus—Equifax, Experian, and TransUnion. Your credit score begins to fall immediately, even though the account is not yet in collections. You will receive calls and letters from the card company's internal collections department asking you to pay.

At 60 days past due, the account is reported as seriously delinquent. At 90 days, the card company may freeze your account, preventing you from making new charges. Between 120 and 180 days, the issuer decides whether to continue pursuing the debt itself or sell it to a third-party collection agency. Most card companies sell the debt because collecting it in-house becomes too expensive.

Once sold, the collection agency takes over. They have the legal right to contact you by phone, mail, or email to demand payment. Under the Fair Debt Collection Practices Act, they cannot call before 8 a.m. or after 9 p.m., cannot harass you, and must stop contacting you if you send a written request to cease communication. However, stopping contact does not erase the debt or stop them from suing you.

How your credit score is affected

A single missed payment can lower your score by 50 to 100 points, depending on your starting score and credit history. The longer the account remains unpaid, the worse the damage. A 30-day delinquency is less severe than a 90-day delinquency, but both are serious.

When the debt moves to collections, your score drops further because a collection account is treated as a new negative item on your report. This compounds the damage from the original missed payments. If you have multiple cards in default, the effect multiplies.

The good news is that the impact weakens over time. A collection account from five years ago hurts less than one from six months ago. After seven years, the account falls off your report entirely, though the damage to your score during those seven years is substantial. Rebuilding your score after collections requires consistent on-time payments and responsible credit use over months or years.

When the card issuer can sue you

Card companies and collection agencies have the legal right to sue you for the unpaid balance. They do not need your permission, and they do not have to warn you before filing. The lawsuit can happen at any point after you default, though most occur between 6 and 24 months of non-payment.

If the card company wins the lawsuit, they receive a judgment—a court order stating you owe the debt. With a judgment in hand, they can pursue wage garnishment, which means money is automatically deducted from your paycheck before you receive it. The amount varies by state and by how much you owe, but garnishment can take 10 to 25 percent of your disposable income.

They can also freeze your bank account and take money directly from it to satisfy the judgment. Some states allow bank levies; others have stricter limits. A few states, including Texas and Florida, have strong protections against wage garnishment for consumer debts, though judgments can still be filed against you.

The statute of limitations—the time limit for suing you—varies by state, typically between three and six years. Once that period expires, the creditor can no longer sue, but the debt itself does not disappear, and collection calls may continue.

Interest and fees keep growing

While your account sits unpaid, interest continues to accrue at your card's APR, and late fees pile up. Most cards charge a late fee of $25 to $40 per month (or more if you have a high balance). After several months of non-payment, the interest and fees can equal 20 to 40 percent of your original balance.

Once the debt is sold to a collection agency, the original card issuer stops charging interest, but the collection agency may add its own fees. Some collection agencies charge interest on the debt they purchased, depending on state law and the original contract terms. This is why a $3,000 credit card debt can balloon to $4,500 or more by the time collection begins.

What you can do if you cannot pay

If you are struggling to pay, contact the card issuer before you miss a payment. Many card companies offer hardship programs that lower your interest rate, waive fees, or create a payment plan you can actually afford. These programs are not advertised widely, but they exist, and asking for one does not hurt your credit further than missing a payment would.

If the debt is already in collections, you can negotiate a settlement. Collection agencies often accept less than the full amount owed because they bought the debt at a steep discount. A settlement might be 30 to 60 percent of the original balance. Get any settlement offer in writing before you pay, and make sure the agreement states the debt will be marked as "settled" or "paid in full" on your credit report.

You can also work with a nonprofit credit counselor through the National Foundation for Credit Counseling (NFCC). They offer free or low-cost sessions to help you understand your options, create a budget, and sometimes negotiate with creditors on your behalf. This is different from a debt settlement company, which charges fees and often makes things worse.

How long this stays on your credit report

A collection account remains on your credit report for seven years from the date of your first missed payment on the original card—not from the date the debt was sold to collections. After seven years, the account is automatically removed, and your credit report is clean of that debt.

However, a judgment can stay on your report longer in some states. A judgment typically lasts 7 to 10 years, and in some states it can be renewed, extending it further. Even after the account falls off your report, a judgment may still be enforceable, meaning wage garnishment or bank levies can continue.

Paying the debt does not remove it from your report, but it does change how it appears. A paid collection account looks better to future lenders than an unpaid one, and some lenders will work with you if the collection is paid and older than two years.

Frequently Asked Questions

Can a credit card company take money from my bank account without a judgment?

No. Without a judgment, the card company cannot directly access your bank account. They can only call and demand payment. Once they win a lawsuit and receive a judgment, they can file a bank levy in most states, which freezes your account and allows them to withdraw funds. Some states have exemptions that protect a portion of your account balance.

What is the difference between a collection agency and a debt settlement company?

A collection agency is hired by the card issuer to recover the debt and is regulated by the Fair Debt Collection Practices Act. A debt settlement company is a for-profit business that charges you a fee (often 15 to 25 percent of the debt) to negotiate with creditors on your behalf. Debt settlement companies often make your situation worse by advising you to stop paying while they negotiate, which damages your credit further.

If I ignore collection calls, will the debt go away?

No. Ignoring collection calls does not erase the debt or stop the collection agency from suing you. The statute of limitations may eventually prevent them from suing, but that varies by state and can take three to six years. During that time, the debt remains on your credit report and collection calls may continue.

Can I get a collection account removed from my credit report before seven years?

You can dispute the account with the credit bureau if the information is inaccurate, and the bureau must investigate. If the collection agency cannot verify the debt, it may be removed. You can also request a "pay for delete" arrangement with the collection agency, where they agree to remove the account from your report in exchange for payment, though not all agencies agree to this.

Will paying off a collection account improve my credit score right away?

Paying a collection account will improve your score over time, but not immediately. The account remains on your report for seven years, and paying it does not erase the damage from the original missed payments. However, a paid collection account is viewed more favorably than an unpaid one, and your score will gradually improve as the account ages and you build positive payment history with other accounts.