What Happens If You Don't Pay a Debt?

Cancel Account

If you have credit card debt, the first thing your company will do is cancel the card. Then, they will send you the full payment on a bill in the mail and will expect you to pay it on a certain date. You will either have to pay it or you can call the company to negotiate a new payment plan. Most companies will want at least a small payment right away to prove your credibility.

Sent to Collections

If you still can't pay off your payments or if the company you owe strictly prohibits negotiations, you will have to deal with a collections company soon after. The company you owe will basically sell your balance to collections This agency will call, mail and hound you for a full payment sent to them. If corrective actions aren't made during this time of collections, your credit will begin to suffer dramatically.

Legal Action

Now that the collections agency has you in their grip, if you still can't come up with money to pay them, they can make legal actions to sue you. Basically, they can file a small claims report on you, depending on how much you owe. This will be taken to your local court and no matter what you decide at that point, a judgment for a plaintiff will be made and you will have to at least pay court costs.

References

• Debt Q & A
• Debt Advice