What Happens When a Debt Goes Unpaid Beyond 90 Days?

When a debt goes unpaid, a chain of events begins that could cause trouble for many years. Learn how to avoid it and where to get help.
Written by:
Rob Sabo
Edited by:
Kristin Marino verified

Americans love to buy on credit.

Credit card balances in the first quarter of 2023 stood at $986 billion, the Federal Reserve Bank of New York reports. Total household debt across the U.S., meanwhile, was $17.05 trillion.

That’s a staggering amount of debt — and sometimes, it can be difficult for borrowers to make regular credit card or mortgage payments.

AmOne created this financial guide on outstanding debt payments to help borrowers better understand the consequences of missed payments beyond 90 days. 

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Why a Debt Might Go Over 90 Days

There are probably as many potential reasons why a debt might go over 90 days past due as there are grains of sand on a Florida beach.

Here are four potential scenarios for missing multiple payments and exceeding the 90-day overdue mark:

Lack of Money/Insufficient Funds

Running out of money could stem from many reasons, including racking up too much debt and exceeding your financial capabilities. Overspending, especially on credit card debt, is typical, especially for unsophisticated or new borrowers. Being over-leveraged — spending more than you earn — is a downward spiral that can be extremely difficult to reverse.

Losing Your Job

Mounting credit card bills compound the stress and anxiety that comes with losing a job. You’ll likely have to earmark any savings for essentials, and credit card payments may not be a priority over missing your mortgage or auto payments, which could result in foreclosure or repossession.

Unexpected Expenses

Even responsible borrowers can be hit with unexpected expenses that derail their financial game plan. You could wreck your car and have to cover a $1,000 deductible or pay for sudden medical expenses like emergency surgery. 

Compounding Balances on Late Payments

If you don’t have enough money to make one credit card payment, you likely won’t have the funds to make two or three, resulting in your account going 60 or 90 days past due. Once you fall behind, squaring up can be more complicated than staying on track. It’s like climbing greased stairs — you’ll probably keep slipping backward regardless of your intentions to reach the top.

No matter the reason, you are in a dire financial predicament if you let credit card debt go unpaid for more than 90 days. In the next section, we’ll examine what can happen to severely delinquent debt.

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Why 90 Days Past Due is Significant on Credit Card and Other Forms of Debt

Missing a payment for 30, 60, and 90 days will negatively impact your credit score, generate late fees, and increase interest on credit card debt.

Your credit card company will likely raise your interest rate, costing you more money on any outstanding debt.

Here’s how things could go.

The Debt Becomes a Charge Off

If you exceed 90 days late, which is three months of missed payments, your credit card company may decide it’s time to throw in the towel and write off the debt. Your creditor will sell your account to a collections agency after completing a process known as a charge-off.

Some lenders won’t charge off your debt until you are extremely delinquent, such as 120, 150, or more days late. 

When a debt is charged off, the credit card company essentially washes its hands of you by closing your account and absorbing the loss.

Unfortunately, your troubles are just beginning.

Collection Agencies Become Relentless

Collection agencies are notorious for their heavy-handed tactics regarding consumer collections of outstanding debt.

While you have certain rights as a consumer, expect the pressure to pay your bill to ramp up exponentially if your credit card debt winds up in the hands of a collection agency. Daily calls to your home or workplace are common tactics, along with a flood of letters regarding your obligation to pay.

In almost every instance, you are probably better off finding a solution with your lender than letting your debt get turned over to a collection agency.

Credit Scores Start Taking a Hit

There’s a tremendous ripple effect on your credit score the longer you are delinquent.

Your credit score could drop as much as 180 points if you are 90 days past due, and the stain of a charge-off will remain on your credit report for many years.

You likely won’t be approved for any additional credit, including auto or home loans, and you probably will have to find a creditworthy consignor if you need to take out any type of loan.

Missed payments can ravage your credit score and impact your ability to borrow or receive favorable loan terms in the future.

Think of your credit score as a pie chart. Multiple elements, such as type of credit, credit usage, total credit, and new credit inquiries, all make up a slice of the pie. Payment history — your ability to meet your financial obligations by making payments consistently and on time — comprises 35% of your credit score. It’s the largest slice of the pie, followed by your total debt at 30%.

Missing one payment may not immediately damage your credit, but missing two payments surely will. Some creditors wait until a second payment is missed before reporting consumer delinquency. Your credit could plummet as much as 80 to 100 points — a huge hit. However, there’s an even greater consideration:

Late fees will stay on your credit report for seven years. You won’t soon escape the consequences of late or delinquent credit card payments.

What Happens When You Are 30, 60, and 90 Days Late?

Whenever you have accumulated credit card debt, there’s a three-step process for the billing and statement cycle:

Account Closing Date

This is when your monthly billing statement closes, and an invoice is generated. Any accrued interest, additional charges, and late fees will appear on the statement.

Payment Due Date

This date shows up on your monthly statement. You must pay your minimum balance due by the date shown, or you’ll be hit with additional late fees. Your due date should stay the same — it’s on the same day each month — though different accounts may have other due dates.

Reporting Date

If you are worried about late payments adversely affecting your credit score, this is the date you should prioritize.

Most creditors will begin reporting late payments to the three major credit bureaus — TransUnion, Equifax, and Experian — on the 30th day past your payment due date.

You may be able to work with creditors to have the late fees for one missed payment waived, but they likely won’t be amenable if you have multiple missed payments or are more than 60 days past due.

What to Expect

Here’s an example of what to expect if you miss payments for 30, 60, and 90 days.

You’ve Got Debt

You have a $10,000 balance on a credit card with a 20% interest rate. Your minimum payment is $266. At this rate, it would take 28 years to pay off your balance, only making minimum payments on that amount.

An Event Happens That Throws Your Finance Off Balance

You lose your job, and money’s tight. You miss your first payment.

Your balance will increase by roughly $168 due to daily interest on the $10,000 balance, plus you’ll be assessed a late fee (we’ll call it $40).

In 60 days, your original balance has risen to $10,208.

You miss payment #2. Your account balance swells to $10,419 after daily interest and late fees.

You miss payment #3, and your balance increases to $10,559 after daily interest and late fees are tacked on.

Additionally, you can expect to hear from your credit card company somewhere between the first and second missed payment.

By 90 days, your creditor recognizes the account is in serious trouble and will attempt to communicate with you through multiple phone calls and emails to prevent a charge-off.

Unfortunately, in most instances, delinquent accounts of more than 90 days are considered uncollectible because it’s just too difficult for consumers to dig themselves out of such a deep financial hole.

Medical Debt: Why it’s Different

Millions of Americans have some type of unpaid medical debt they are working to shed.

If you fall 30, 60, or 90 days behind on your payments, your medical provider may choose to send your account to collections; however, the impact on your credit report is different than with other forms of unpaid consumer debt.

The three main credit reporting bureaus allow you 365 days to resolve the issue, and medical debt under $500 won’t even appear as a negative mark on your credit report.

Larger unpaid medical bills that have been sent to collections will negatively affect your credit score, albeit a delayed one.

What Happens if You Just Walk Away From Debt?

In almost every instance, walking away from debt will decimate your credit score. It may not seem important at the moment, especially if you just don’t have enough money to pay your bills, but the repercussions will last years — seven, to be specific.

Your ability to borrow or secure any financing will be nonexistent until you begin the long road back to creditworthiness.

Read on to learn how you can fix the damage done by missed credit card payments.

What You Can Do to Fix It

Perhaps the most important thing consumers who fall behind on their credit card payments can do is contact their creditors and try and arrange a solution.

Ignoring the problem won’t make it go away — instead, it makes it much worse. By reaching out, you are showing your creditors you are aware of the problem and are attempting to find a solution.

In all instances, you’ll need money to keep your accounts from going to collections — goodwill will only carry you so far. One option is to borrow from family or friends, but a debt consolidation loan could help.

How a Debt Consolidation Loan Can Help

Debt consolidation loans can help reduce the impact of high-interest credit card debt and keep your accounts current. Here’s how they work:

You have to qualify for a personal loan, but if you do, you may receive a substantially lower interest rate than your credit card, which can translate to lower payments.

You’ll also have fixed monthly payments and a predetermined loan maturity date.

You can use the loan to pay off your credit card balances and work on repaying the debt consolidation loan while saving money on interest.

Personal loan terms are based largely on your credit score — higher credit scores translate to less risk for lenders.

If you pursue this strategy, getting the pieces on the board is vital before missed payments appear on your credit score. If you wait too long, your credit score could tumble, and you may not be able to qualify for a debt consolidation loan. If you have a credit score of 750 or above, you are much more likely to get favorable interest rates on debt consolidation loans.

Find a Lender

AmOne has helped more than 13 million people secure debt consolidation and personal loans from lenders nationwide. Many lenders are online institutions such as SoFi, Prosper, Upstart, and Best Egg. These institutions work just like brick-and-mortar banks and credit unions, but loan rates may be more favorable because these lenders tend to have significantly lower overhead expenses.

After filling out a simple online form on our site, we can match you with various lenders where you can select the best rates and loan terms to meet your needs. You’ll have to meet a lender’s approval criteria before receiving your funds, but in many instances, you can be fully funded in 24 to 48 hours.

Debt consolidation loans work best for people with the financial means to repay them. In the case of a debt consolidation loan, you won’t be incurring any additional debt; rather, you’ll be swapping high-interest debt for a fixed payment with a lower interest rate, when applicable. If you have over-leveraged yourself or lost your ability to meet your financial obligations, taking out a debt consolidation loan is probably not the correct strategy to put on the board.

The Bottom Line

Missing credit card payments has compounding adverse effects.

You can survive missing one payment, and you may even be able to work with your creditor to have late fees waived if it’s your first time.

Missing multiple payments increases your credit balance, adds additional late fees, and severely damages your credit score.

Allowing a debt to go unpaid past 90 days may lead to a charge-off and your debt being sold to a collections agency.

Your financial problems will only increase from there, and the ramifications will be felt for many years.

Consider alternative ways to keep paying your credit cards on time.

If you want to swap high-interest debt for a fixed monthly payment and interest rate, it may be time to look into a debt consolidation loan.