1) You Might End Up In Prison For Not Paying Off Your Credit Card Debt

This myth is a complete work of fiction, and borrowers are never sent to jail for failing to pay of their credit card debt. The worst thing that can happen to someone who owes a credit card company money, is that the court may issue an order specifying exactly how much of their income must go towards paying off their debt.

If a court has issued a judgment, and the borrower is still unable to make the payment, the court may then issue a further judgment requiring the borrower’s employer to make payment on their behalf, whilst deducting the amount from the borrower’s salary directly.

In the very worst cases, the court may issue an order which gives the credit card company the right to some of the sale proceeds of any home that the borrower may own when it is put up for sale. This type of order is not a requirement for the borrower to sell their home, only a requirement that some of the proceeds from a sale be used to pay down the borrower’s credit card debt.

That doesn’t mean borrowers have a free ride, if a credit card company gets a judgment passed against a defaulting borrower that will remain on the individuals credit record for a good number of years, making it much harder to obtain finance in the future.

2) Credit Card Companies Send Bailiffs To Collect Money Owed

Many people worry that if they miss making their monthly payments continuously, that the credit card company can send their bailiffs to collect.

This is complete nonsense, credit card companies have no legal rights to send bailiffs to the homes of borrowers who default, and if anyone from a credit card company threatens that kind of action, that threat should not be taken seriously.
Card companies do have the right to apply to the court to send a bailiff, but can only make that application only after the court has issued a judgment against a defaulting borrower. Credit card companies can hire private debt collectors who will do their best to collect the outstanding amount. A debt collected has no authority in law whatsoever, so borrowers are not even required to speak to them.

3) Bailiffs Cannot Force Their Way Into The Home Of Defaulters

If a bailiff wishes to force entry into the home of a defaulting borrower in order to take their belongings, they can apply to the court for a warrant giving them the right to force entry. In practice however, this is very rare.

Bailiffs also have the right to break into a defaulting borrower’s home if the bailiff had previously given permission to enter the borrowers home, and they failed to stick to a debt repayment arrangement.

Bailiffs have a strict code of conduct that they must follow. The must always show both their identification and authorization when asked.

4) A Bad Credit Ratings Is For Life

Untrue, bad credit ratings usually last no more than just a few years and in most developed nations, this means between six to eight years.

5) You Need To Pay For Debt Advice

This is a common rip off. There is no need to pay anyone for money advice which is given for free from a number of debt counseling organizations who offer guidance and provide options. If a lender tried to charge for advice it is a rip off, there is simply no reason to pay for something that can be gotten for free.

6) If You Die Your Family Will Have To Pay Your Debts

This is false for the most part, however there is a little truth. Generally speaking surviving family members are not liable for the debts of a borrower who has died. If however the individual borrowed money jointly with their spouse for example, then the surviving spouse continues to be liable for the debt even after an individual’s death.

The surviving spouse however will also end up with full ownership of any asset that the debt was used to acquire, for example property.