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5 things to know if your credit card debt is in collections
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Credit card debt has become a pressing issue for millions of Americans, with recent data showing a troubling surge in maxed-out accounts and delinquent payments. And while it’s easy to fall into credit card debt in any economic environment, the current high-rate landscape has only exacerbated the problem, making it more challenging for cardholders to keep up with their payments.
With the Federal Reserve keeping rates high to combat inflation, credit card APRs have been climbing, and are now nearing record highs. In turn, cardholders who are carrying balances are accruing interest at an alarming rate, making it increasingly difficult to chip away at their principal debt.
If you’ve been struggling with credit card debt and have accounts that have gone into collections, it’s crucial to take action sooner rather than later. Ignoring the problem won’t make it go away and can lead to severe long-term consequences for your financial health. By fully understanding your situation, though, you may be better prepared to regain control of your finances.
Want to get rid of your credit card debt now? Learn more about your top debt relief options here.
5 things to know if your credit card debt is in collections
Here are a few key things you should know if your credit card debt is in collections:
Fees and charges are likely still accruing
When your credit card debt is in collections, it’s easy to assume that the balance has been frozen. However, this is generally not the case. Many collection agencies continue to add interest, late fees and other charges to the outstanding balance. This means that even if you’re not actively using the card, your debt could still be growing.
That’s why it’s essential to request a detailed breakdown of your current balance from the collection agency. This will help you understand exactly what you owe and how much of it is the original debt versus added fees and interest — which can help you make decisions about how to proceed with repayment or negotiations.
Don’t let the fees continue to accrue. Take steps to get rid of your high-rate credit card debt today.
Your credit score is taking a serious hit
Having a credit card account in collections can have a devastating impact on your credit score. A collection account is considered a major negative item on your credit report and can remain there for up to seven years from the date of the first missed payment that led to the collection.
The exact impact on your score can vary, but it’s not uncommon for a collection account to cause a drop of 100 points or more. This significant decrease can affect your ability to secure new credit, rent an apartment or even land certain jobs. It can also result in higher interest rates on any future loans or credit cards you might qualify for.
More serious repercussions could be on the horizon
While having your debt in collections is already a serious situation, it’s important to understand that things could escalate further if left unaddressed. Collection agencies have several tools at their disposal to recover the debt, and one of the most serious is pursuing legal action against you.
If a collection agency decides to sue you for the unpaid debt, they can obtain a court judgment. This judgment gives them additional powers to collect the debt, including wage garnishment, bank account levies or even property liens, all of which can have severe and long-lasting consequences on your financial stability.
You have rights in this situation
It’s important to remember that you also have rights in this situation. The Fair Debt Collection Practices Act (FDCPA) provides consumers with protections against abusive, unfair or deceptive practices by debt collectors. Some key rights under the FDCPA include:
- The right to request debt verification
- Protection from harassment
- Control over communication
- Honest representation
Understanding and asserting these rights can help you navigate the collection process more effectively and protect yourself from unfair practices.
There are solutions to consider
While dealing with credit card debt in collections can feel overwhelming, there are several potential solutions to consider, including credit card debt forgiveness, also known as debt settlement. This option involves negotiating with the collection agency to pay less than the full amount owed.
Credit card debt settlement can be particularly effective for accounts in collections, as creditors may be willing to accept a lump sum payment for less than the full balance rather than risk receiving nothing. However, it’s important to get any settlement agreement in writing and understand the potential tax implications of forgiven debt.
Some collection agencies may also be willing to set up a payment plan that allows you to pay off the debt over time. This can make the debt more manageable and help you avoid more severe consequences.
The bottom line
Having credit card debt in collections is a serious financial situation, but it’s not an insurmountable one. By understanding the ongoing impact on your finances, knowing your rights and exploring available solutions, you can take steps toward resolving your debt and rebuilding your financial health. But the key is to take action rather than ignoring the problem, so create a plan of action as soon as possible and then stick to it.
California Gov. Gavin Newsom on Sunday vetoed a landmark bill aimed at establishing first-in-the-nation safety measures for large artificial intelligence models.
The decision is a major blow to efforts attempting to rein in the homegrown industry that is rapidly evolving with little oversight. The bill would have established some of the first regulations on large-scale AI models in the nation and paved the way for AI safety regulations across the country, supporters said.
Earlier this month, the Democratic governor told an audience at Dreamforce, an annual conference hosted by software giant Salesforce, that California must lead in regulating AI in the face of federal inaction but that the proposal “can have a chilling effect on the industry.”
The proposal, which drew fierce opposition from startups, tech giants and several Democratic House members, could have hurt the homegrown industry by establishing rigid requirements, Newsom said.
“While well-intentioned, SB 1047 does not take into account whether an AI system is deployed in high-risk environments, involves critical decision-making or the use of sensitive data,” Newsom said in a statement. “Instead, the bill applies stringent standards to even the most basic functions — so long as a large system deploys it. I do not believe this is the best approach to protecting the public from real threats posed by the technology.”
Newsom on Sunday instead announced that the state will partner with several industry experts, including AI pioneer Fei-Fei Li, to develop guardrails around powerful AI models. Li opposed the AI safety proposal.
The measure, aimed at reducing potential risks created by AI, would have required companies to test their models and publicly disclose their safety protocols to prevent the models from being manipulated to, for example, wipe out the state’s electric grid or help build chemical weapons. Experts say those scenarios could be possible in the future as the industry continues to rapidly advance. It also would have provided whistleblower protections to workers.
The legislation is among a host of bills passed by the Legislature this year to regulate AI, fight deepfakes and protect workers. State lawmakers said California must take actions this year, citing hard lessons they learned from failing to rein in social media companies when they might have had a chance.
Proponents of the measure, including Elon Musk and Anthropic, said the proposal could have injected some levels of transparency and accountability around large-scale AI models, as developers and experts say they still don’t have a full understanding of how AI models behave and why.
The bill targeted systems that require more than $100 million to build. No current AI models have hit that threshold, but some experts said that could change within the next year.
“This is because of the massive investment scale-up within the industry,” said Daniel Kokotajlo, a former OpenAI researcher who resigned in April over what he saw as the company’s disregard for AI risks. “This is a crazy amount of power to have any private company control unaccountably, and it’s also incredibly risky.”
The United States is already behind Europe in regulating AI to limit risks. The California proposal wasn’t as comprehensive as regulations in Europe, but it would have been a good first step to set guardrails around the rapidly growing technology that is raising concerns about job loss, misinformation, invasions of privacy and automation bias, supporters said.
A number of leading AI companies last year voluntarily agreed to follow safeguards set by the White House, such as testing and sharing information about their models. The California bill would have mandated AI developers to follow requirements similar to those commitments, said the measure’s supporters.
But critics, including former U.S. House Speaker Nancy Pelosi, argued that the bill would “kill California tech” and stifle innovation. It would have discouraged AI developers from investing in large models or sharing open-source software, they said.
Newsom’s decision to veto the bill marks another win in California for big tech companies and AI developers, many of whom spent the past year lobbying alongside the California Chamber of Commerce to sway the governor and lawmakers from advancing AI regulations.
Two other sweeping AI proposals, which also faced mounting opposition from the tech industry and others, died ahead of a legislative deadline last month. The bills would have required AI developers to label AI-generated content and ban discrimination from AI tools used to make employment decisions.
Some residents east of Atlanta were evacuated while others were told to shelter in place to avoid contact with a chemical plume after a fire at a chemical plant.
Rockdale County Fire Chief Marian McDaniel told reporters that a sprinkler head malfunctioned around 5 a.m. Sunday at the BioLab plant in Conyers. That caused water to mix with a water-reactive chemical, which produced a plume of chemicals. The chief said she wasn’t sure what chemicals were included.
A small roof fire was initially contained, but reignited Sunday afternoon, Sheriff Eric Levett said in a video posted on Facebook as gray smoke billowed into the sky behind him. He said authorities were trying to get the fire under control and urged people to stay away from the area.
People in the northern part of Rockdale County were ordered to evacuate and others were told to shelter in place with windows and doors closed. Sheriff’s office spokesperson Christine Nesbitt did not know the number of people evacuated.
The federal Environmental Protection Agency and the Georgia Environmental Protection Division were both on site, county Emergency Management Director Sharon Webb said. The agencies are monitoring the air “to give us more of an idea of what the plume consists of.”
McDaniel said crews were working on removing the chemical from the building, away from the water source. Once the product is contained, the situation will be assessed and officials will let residents know whether it is safe to return to their homes, she said.
An evacuation center was opened at Wolverine Gym in Covington.
Washington — Sen. JD Vance and Minnesota Gov. Tim Walz will face off on Tuesday in the first and only vice presidential debate of the cycle, as the two candidates look to prop up the Republican and Democratic tickets with fewer than 40 days until Election Day.
The debate, hosted by CBS News at the CBS Broadcast Center in New York City, will be moderated by “CBS Evening News” anchor and managing editor Norah O’Donnell and “Face the Nation” moderator and CBS News chief foreign affairs correspondent Margaret Brennan.
Here’s what to know about how the candidates are preparing for the debate:
How JD Vance is preparing for the VP debate
The Ohio Republican has been preparing for the debate for more than a month, a source directly involved told CBS News, including with “murder board” sessions with a small team that includes Vance’s wife and his advisers, along with senior Trump adviser Jason Miller.
Among Vance’s main focuses during the preparation has been studying Walz’ debate style and policy record, the source said, noting that Vance will attempt to highlight what he sees as the Minnesota governor’s left-wing views during the debate.
Vance told reporters last week that his plan is to break down what the Trump-Vance administration would do to make “life better” and connect that to policy.
“So, we’re studying up as much as we can on the issues that matter to the American people, and I’m looking forward to it,” Vance said.
House Majority Whip Tom Emmer, a Minnesota Republican, is standing in for Walz during Vance’s debate prep, four sources familiar with the preparations told CBS News. Emmer and Walz have deep roots in Minnesota and are close in age.
Emmer told ABC’s “This Week” on Sunday that he’s known Walz for decades and has spent the last month working to “get his phrases down, his mannerisms.”
“My job was to be able to play Tim Walz so JD Vance knows what he’s going to see,” Emmer said.
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How Tim Walz is preparing for the VP debate
Walz has been preparing for the debate with a close team of advisers, a source familiar with the preparations told CBS News. Some of the people involved also helped Vice President Kamala Harris take on former President Donald Trump, among others, like a long-time aid to Walz who worked with him during his bids for governor.
For Walz, whose name recognition was until recently limited outside of Minnesota, the focus is on continuing to introduce himself to the American people, according to the source. He’ll also work to highlight Harris’ vision for the nation’s path forward.
“You’ll hear me talk like I have about things that impact Americans, making sure they have the opportunity to thrive, making sure that we’re being factual in how we talk about that,” Walz told MSNBC’s Rachel Maddow of the debate earlier this month. “And so I’m looking forward to it. I’ll work hard, that’s what I do.”
During debate prep, Transportation Secretary Pete Buttigieg is standing in for Vance, a campaign official familiar with the preparation told CBS News. The former mayor of South Bend, Indiana, also assisted Harris during her debate prep in 2020, and is close in age to Vance.
When and how to watch the presidential debate
Debate coverage on CBS News 24/7 begins at 4 p.m. ET, with the debate getting underway at 9 p.m. ET on Oct. 1.
The 90-minute debate will be streamed on CBS News 24/7 and Paramount+ across all available platforms and CBSNews.com. The debate will also be simulcast across other broadcast and cable networks.
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California Gov. Gavin Newsom vetoes first-in-nation AI safety bill
Residents in Georgia ordered to evacuate or shelter in place after fire at chemical plant
Israeli airstrikes kill dozens across Lebanon as Hezbollah confirms a 7th top commander was killed
California Gov. Gavin Newsom vetoes first-in-nation AI safety bill