Yes to both.
Chiles will dry up completely on the plant, sometimes even splitting and spreading seed.

I've also seen mold/infestation develop in particular pods.

Most recently, some of my pods split after too much rain.


Josh

The will and do go bad or dry up.

Generally for the dry climate I live in a ripe pepper will last much longer on the bush than if I pick it and put it in the fridge in a cloth bag (the best way I've found to keep peppers fresh in the fridge)

Of course it depends on environment/weather and the type of pepper. Thin skinned peppers (again in my dry climate) will dry on the bush, thick skinned (like bell) will last a very long time after getting ripe, but eventually will wrinkle and become susceptible to rot/fungus.

I agree that they can go bad on the plant. But more importantly, the more ripe peppers you pick, the more new peppers you GET! I had 2 jalapeno plants this year from the same source. I picked green pods from one of them all year and let the other go with red pods for most of the season. The green one produced at least 5 times the peppers as the red. When I finally picked my red ones, new peppers came right away. Not saying you should pick your peppers before they're ripe, but definately pick em when they get ripe.

Have you tried freezing them? I find they don't lose much flavor or heat if any. They just get a little mushier. If you only use 1 a month, I would bet that the cut pepper is more than just a little mushy after that long.

I'd gladly take one off your hands before they go bad :)

I second the suggestion to freeze them.

You can simply chop them up and freeze them, or roast them and skin them and freeze them.

Peppers freeze well and as long as the package is sealed well, they retain their flavor when frozen.