If I "walk away" from my property with a foreclosure could my credit cards be recalled and canceled?
Bill, I have an investment property in Florida that has lost over 50% of the purchase cost. I have been unable to rent it and can no longer make the monthly mortgage payment and association fee. If I "walk" from the property with a foreclosure could my credit cards be recalled and canceled. All my other bills are currently paid on time and I have an excellent credit score. thanks...Richard
Richard, thanks for your question. While I do not think that the foreclosure should cause your credit cards to be recalled, it is definitely going to hit your credit real bad. The only thing I can foresee happening is that the credit card companies might jack up the interest rates on your accounts based on the foreclosure on your credit profile. This is due to what is called the "universal default clause" that most of these credit card contracts have built into them.
This provision, generally buried in the fine print of your credit card agreement, basically says that if you are more than 30 days late on any payment to anyone, the interest rate on your credit card could shoot up and your credit score may be damaged. You need to find out if these are applicable to your accounts. You can read more about by following the links below:
Universal default rules explained.
Universal default - On Wikipedia.
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