Issue Date: April 26, 2009
Other ThinkSmart articles this week:
 Eat Smart Food journals bring eating habits to light
Travel Smart Live large: Rent a condo for vacation
Money Smart Unpaid bills: How long can you put off paying?
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THINK SMART
Helpful tips for your everyday life
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MoneySmart |
SHARON EPPERSON |
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Unpaid bills: How long can you put off paying?
Two weeks ago, we looked at which unpaid bills you should tackle first. Now we look at typical grace periods. "There are always consequences for not paying, but it's the severity of the consequences that you need to consider," says Liz Pulliam Weston, author of the new book "Your Credit Score: Your Money & What's at Stake." "Look at how fast your creditors are likely to move against you."
Mortgage: If you fail to pay, the bank can begin foreclosure in as little as three months.
Car loan: A lender can repossess your vehicle if you're a day late, but most will wait about 60 days.
Credit cards: After about six months of missed payments, credit card companies start to send your account to collections.
Tax debt: Technically, there's no "grace period," but ask about an installment plan. The IRS can eventually garnish your wages and seize property or bank accounts.
Student loans: Lenders will wait about nine months before placing a federal loan in default. Starting in July, graduates can opt for a loan program that bases payments on up to 15% of your annual gross income. (See ibrinfo.org for more information.)
Blemishes on your credit report aren't permanent, but they will stay on it for seven years.
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