What happens to my credit card debt if the company fails?

Chelsea O asked:


I have a credit card open with Citi and I owe them money. What will happen to my account and debt if Citi fails and closes their doors?

Douglas

Tags: Credit Debt, Doors, Money

This entry was posted on Monday, March 9th, 2009 at 7:43 pm and is filed under Debt Relief. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

3 Responses to “What happens to my credit card debt if the company fails?”

1. zeuz Says:
   March 10th, 2009 at 7:48 am

   Rosa

   You will owe the debt to some other financial institution.

2. Sciurus Reprobatia Says:
   March 12th, 2009 at 2:01 pm

   Lisa

   When they fail, their assets will be auctioned off. Just like a table or a lamp, the debt you owe them counts as an asset. So for example if you owe $500, another company could “buy” that debt for $400, but you’d still owe $500.

   But since Citigroup is actually a bank, the government won’t let them simply fall into bankruptcy. They’ll most likely facilitate a takeover from another bank or just bail them out. Even if the government lets Citi fail, then you’ll momentarily owe the government money until they find someone to sell the debt to.

3. Reena Says:
   March 15th, 2009 at 11:13 am

   Carol

   The same thing that happened to Wachovia customer debt… you will still get your monthly bill. The only difference is that you are now owing it to Wells Fargo…

   Whoever buys them out gets your “business”.