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What Happens When You Default On Student Loans and Credit Cards- part 3/4

By Carl Willoughby

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Published: 21Jan2007
Word count: 570
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Many not-so-pleasant things can happen to you if you don't pay your credit card and student loans.

Here's what happened to me...

I started getting letters asking me to pay the loans in full. When I ignored them, I started getting more letters. At first the letters are kind of friendly.

"In case you've forgotten or didn't receive the last letter"... Then they get stronger. "Warning: You are late with your payment"... Then they get threatening. "Legal Action Pending"...

Then, One day a letter comes saying - This is your FINAL notice.

I thought "Good, at least I won't have to hear from them anymore" - WRONG! - More letters keep coming. I ignored these letters for a very long time.

And then one day THE letter comes telling me that I will NOT be receiving my State Income Tax Refund Money. The money is being withheld to pay a debt. Oh Crap!… I was counting on that money.

Oh well, let me just get on with my life.

Time passes, I forget about it. Life is good. And then one I go to the bank to withdraw some cash out of the ATM machine.

"Sorry, that transaction is not available at this time".

"Stupid ATM machines" I think. I call customer service to tell them off and complain, and I'm informed that there is a "Freeze" on my account.

A "freeze" on your account is like a banking Black Hole. NOTHING can escape. You can put money in, but you can't take it back out. Nothing comes out... No money. The account is now dead and the money in the account stays there until the matter is cleared up.

Or so I thought… Meanwhile, the automatic deductions that I had previously set up and which had worked just fine for such a long time, no longer go through or get paid.

So, what does the bank do?

They charge you with a $30 insufficient fund charge... ...each occurance.

"But the money is in the account" I protest. "Not anymore, deadbeat" is what the banker was probably thinking. What they actually say to you is that you have to take the matter up with the company that froze the account. I'm thinking "But I don't even know who froze the account". They offer no help.

But Meanwhile, the bank is happy to keep charging you $30 everytime an auto-debit attempts - until ALL the money is sucked out the account.

So, why not just close the account. Because YOU CAN'T. It's frozen.

And that's not the end of it! Oh no...

Until you stop the auto-debits, they keep charging you. You had money in the account, the bank takes ALL OF IT and keeps charging you.

And now you owe the bank money!

And your creditors, which are NOT getting paid, start slamming you with late fees, sometimes over limit fees and start calling you on the phone with some "friendly" reminders that you still owe them money.

And it doesn't stop there… No, No, No...

All right I think - "Screw Citibank". I'll just open an account elsewhere. And so I did.

The thing is… Now I'm afraid to leave any money in the account, wondering when "Big Brother" will find this account and seize and freeze the money.

And you start wondering if they will place a "freeze" on your credit cards (if you're lucky to have any left).

Carl Willoughby has worked as a Licensed Registered Representative for the Prudential Insurance Company, as a Computer Programmer for the New England Telephone Company, as a Computer Salesman for SEARS and is self-employed as an Internet Marketing Consultant and Musician. This is part 3 of a 4 part series by the same title. For the complete story, go to: http://www.StudentLoanDebtConsolidationSite.com

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