Canceling your phone contract can be a liberating feeling, but if you don`t pay the remaining balance on your account, you could be in for an unpleasant surprise. In this article, we`re going to explore what happens if you cancel your phone contract and don`t pay, and why it`s important to settle any outstanding balances before severing ties with your service provider.
First and foremost, it`s important to understand that a phone contract is a legally binding agreement between you and your service provider. When you sign on the dotted line, you`re agreeing to pay a certain amount of money every month for a set period of time. If you decide to cancel your contract before the end of this period, you may be hit with an early termination fee. This fee can be quite substantial, depending on how much time is left on your contract.
If you don`t pay this fee, your service provider could take legal action against you. They may send your account to a collections agency, which can damage your credit score and make it difficult for you to obtain credit in the future. Additionally, if the amount you owe is significant, your service provider could take you to court to recover the debt.
Even if you don`t owe an early termination fee, canceling your phone contract and not paying any outstanding balance could result in your account being sent to collections. This can happen even if you cancel your contract because most service providers reserve the right to report delinquent accounts to credit bureaus.
It`s also worth noting that canceling your phone contract and not paying can limit your ability to obtain new phone contracts in the future. When you apply for a new contract, your service provider will likely perform a credit check to determine if you`re a high-risk customer. If you have a history of not paying your phone bills, you may not be approved for a new contract or may be required to pay a higher deposit.
In summary, canceling your phone contract and not paying any outstanding balance can have serious consequences. It can damage your credit score, limit your ability to obtain new phone contracts, and even result in legal action being taken against you. If you`re considering canceling your phone contract, be sure to pay any early termination fees and settle any outstanding balances to avoid these potential pitfalls.