Credit cards are exceedingly easy to apply for, to which for most applications, it is simply on the honor system, that is to say, you fill out your income, home ownership or rental and the monthly amount of such, identification, last four digits of your Social Security #, and then through the magic of computer processing, algorithms, and credit scores, the attending bank will make a decision in regards to your credit card and your credit limit or denial, often within seconds, online. This means for those that are issued credit cards, that legally the credit card as issued to you, in almost all cases is classified as an unsecured credit line to you. What this signifies, is that the credit card company has given you a credit limit which is secured against none of your assets, but simply secured instead, on your good faith, and the good likelihood that you will pay upon it.
However, despite the fact that most Americanshave not only good intentions to make good on their debts, but also plans to stay continually employed for thirty or thirty-fiveor even more years, these plans don't always pan out, even with the best of intentions. For instance, you might get laid off and find that getting another job at equal or better pay to be difficult, or you might get injured or sick, necessitating high medical expenditures that are completely unexpected, or other unforeseen events might occur that debilitate your ability to make your payments on time or even at a minimal level. Unfortunately, when these types of events occur, it can quickly degenerate into a downward spiral and the debt thus created becomes overwhelming and without the appearance of a good ending in sight for you as a consumer.
Not too surprisingly, the bank that issued you the credit card, does not really care about your problems or issues, they mainly care about receiving in full, the monies that you have borrowed and that are owed to them, but because the debt created is still yet unsecured, there isn't much they can do to collect on it, unless they either come to a legal arrangement with you, that is voluntarily entered into, or take you to court to sue you and thereby win monetary damages against you. Until that time, banks are pretty much limited to legally harassing you, and/or having a collection agency legally harass you, but these annoying phone calls and pestering, can usually be kept at bay, because they have no legal judgment against you.
The real problem with credit card debt that is due and unpaid is when it crosses over to become a legal judgment against you and upon doing so this means that a lien can be attached to your legal assets, such as a home, a car, or as a garnishment against your wages. However, in order for a judgment to be rendered against you, the credit card company will have to take you to court, and receive from that court a judgment against you, in which they are hoping that you simply won't show up, which means in most cases upon your non-appearance that a summary judgment will be issued against you, allowing the bank at that time to legally place a lien on your property to which when it comes time to sell or to transfer such property, you will forfeit those funds to the bank, subject to certain exemptions and rules.
The bottom line then is that credit card debt can become a legal lien against assets that you have, in which, based on your dire financial straits, often are assets that you cannot afford to spare to the bank. This means, should you have a home, that either has positive equity, or the reasonable hope of eventually having positive equity, and that is not in foreclosure, you must make every effort to fight off the credit card debt collectors and should it come to court, you must make your appearance, and plead your cause. There are several typical defenses to make against the bank such as: challenging, denial, requesting proof, and so forth, recognizing too that no matter what course your take, the very fact that you are standing up for your rights is almost certain to bring a judgment that is fairer and more beneficial to you, and will ultimately typically not mean the sacrificing of something so important as the actual equity of your home or similar.