If I Don’t Pay My Bills Anymore, What’s the Worst That can Happen?

Some people aren’t aware that there is a middle ground between keeping up with your bills and filing for bankruptcy. Others are fully aware of what it’s like to live in that middle ground, and it can be a scary place. But what exactly happens when you don’t pay your bills? Can you survive without the protection of bankruptcy?

A Field Day for Creditors

Once you stop paying your bills, you will notice that you have become very popular with your creditors. They will begin by calling you and sending you letters. If they don’t get in touch with you, or if you do speak to them but don’t pay them, they will continue to contact you more and more. Creditors are know to be relentless, and are not known for congeniality.

After this goes on for a while, your creditor will ultimately sue you for what they are owed. You will get an envelope in the mail telling you that you have 20 to 30 days to respond. You can choose not to respond. You can also try and defend yourself, but since you legitimately owe the money, you will likely lose. Either way the court will eventually enter a judgment against you.

What Happens After the Judgement?

With a judgement, a creditor can garnish your wages. This means they can take a portion of each of your paychecks until they are paid in full. In most places that means you will lose 25% of each and every check. If you owe the creditor a lot of money, this can drag on for years.

The Lien

On occasion, a creditor might choose to place a lien on property you own rather than garnish your wages. This won’t affect you right away but will become a problem when you decide to sell your property. You won’t be able to sell until either your creditor is paid off or he is paid out of the proceeds of the sale. Either way the creditor will be getting his money when the property is sold.

The Dreaded Levy

A less common alternative to garnishment is a bank levy. When your creditor jumps through the proper legal hoops, he will be able to take what is owed directly from your checking account. Imagine one day trying to withdraw cash from the ATM and there is insufficient funds. When you ask your bank about it, they simply tell you, “a creditor levied your account and there isn’t anything we can do about it.”

 

Contact us for assistance today if any of these unfortunate situations applies to you