Consequences of Ignoring Your Debts

At the law office of Randy Zeldin, Esq., I am frequently asked about the consequences of ignoring debts. These are the most common answers:

  1. Poor Credit Scores: If you are behind on your debts, your credit scores will become awful. As long as you don’t make payment arrangements or discharge the debts in bankruptcy, the credit scores will remain poor. A poor credit score will make obtaining future credit difficult or impossible.

  2. Foreclosure: If a debtor is very delinquent in mortgage or home equity loan payments, the lender has the legal right to foreclose (force a sale of your house) to recover the balance of the debt. Many debtors lose whatever equity they have in their house, as a result of a foreclosure sale.

  3. Repossessing or Taking Property: Many loans, such as car loans, furniture or appliance loans and other “big ticket” items are generally what are called “secured loans.” A secured loan is linked to specific property, such as your car and is known as “collateral.” If you default or fail to pay back the loan on a secured debt, the creditor can repossess the collateral through legal mechanisms.

  4. Lawsuit: If you don’t pay a debt, the most likely consequence is that you will be sued. Even if you have no assets to pay back a creditor, most court judgments can last up to 20 years. Creditors can enforce judgments by seizing property such as a bank account or garnishing wages.

  5. Lien on Your Property: A lien is a claim against your property, which typically is filed after a lawsuit. Some liens, such as tax liens, child support liens and mechanic’s liens, can be filed without a law suit.

  6. Jail: Going to jail for not paying a debt is essentially prohibited by law. There are exceptions for violating a court order; willfully failing to pay income tax and others.

Bankruptcy laws are often able to protect you from the above consequences, but the laws are extremely complicated. The law office of Randy Zeldin, Esq. can help consumers in South Florida from Ft. Lauderdale, Boca Raton to West Palm Beach.

Contact us for a free and confidential consultation.