What happens after you miss a debt settlement payment?

MoneyWatch: Managing Your Money What happens after you miss a debt settlement payment? We may receive commissions from some links to products on this page. Promotions are subject to availability and retailer terms. .chip { background-image: url('/fly/bundles/cbsnewscore/images/chip-bgd/chip-bgd-moneywatch.jpg'); } By Angelica Leicht Angelica Leicht Senior Editor, Managing Your Money Angelica Leicht is the senior editor for the Managing Your Money section for CBSNews.com, where she writes and edits articles on a range of personal finance topics. Angelica previously held editing roles at The Simple Dollar, Interest, HousingWire and other financial publications. Read Full Bio Angelica Leicht April 20, 2026 / 11:36 AM EDT / CBS News Add CBS News on Google A missed debt settlement payment can undo months of progress and lead to other repercussions. Getty Images/iStockphoto After years of elevated borrowing rates and rising living costs, Americans have racked up a staggering amount of debt and it's having a significant impact on their financial health. Credit card balances alone have topped $1.23 trillion, and aggregate delinquency rates have been climbing in tandem. In turn, more people are turning to debt settlement to resolve accounts they can no longer keep up with. Debt settlement is often sold as a second chance for borrowers with high-rate balances they can no longer afford — and, in the right situation, it certainly can be. After all, those drowning in high-rate debt are generally better off agreeing to pay a lower lump sum or structured payments for less than what's owed, as doing so can provide an affordable way to resolve an otherwise unaffordable debt. But that relief comes with certain conditions, including consistent monthly payments that must be deposited into a dedicated account. Those funds are then used to negotiate and pay off debts over time. Miss a payment, and the entire strategy can start to unravel.But what actually happens if you f...