What Happens if I Don’t Pay My Creditors?
Not being able to pay all of your bills when they are due can have serious consequences. The first thing that is likely to happen is that you will receive a call from the lender asking for payment, and the longer you are unable to make satisfactory payment arrangements with the creditors, the more frequent the calls will become. At some point you may get turned over to a collection agency, and debt collectors have a way of increasing the frequency of calls and/or sending letters even more. If you are not able to work something out with the collector, you might end up being sued. Unless you can establish a valid defense to the nonpayment, and simply not having enough money to pay all of your bills is not a valid defense.
What Actions Can My Creditors Take Against Me?
The lender will probably get a judgment against you. Once judgment has been entered, you can expect collection efforts to begin.The most common collection activity is garnishment of your wages or of your bank account, but you can file a claim of exemption if you do not have more than you need to live on. Another common collection tactic is to ask the Court to order you to appear at a hearing and provide information about your assets. The failure to show up at this hearing can result in a contempt citation being issued, and that in turn can result in a bench warrant if you are unable to purge yourself of the contempt.
Will The Authorities Enforce The Judgment on Behalf of My Creditors?
While the authorities are unlikely to aggressively pursue your arrest, and there is no such thing as a “debtor’s prison”, there is an outside chance you will be made to answer the warrant if you want to avoid incarceration. Rather than have to deal with this process, a good alternative can be to file for bankruptcy. Bankruptcy can benefit you as follows:
● When you file a case, the calls and letters have to come to an immediate stop.
● If you are being garnished, the garnishment must be withdrawn.
● Lenders are not permitted to file lawsuits against you after you file bankruptcy.
● Even the IRS must cease collection activities while you are in bankruptcy.
One word of caution about pending lawsuits, or those that the lender is about to initiate, if the lender gets relief in the bankruptcy case the lawsuit against you can proceed. However, the lender is no longer able to ask for money from you, they are simply allowed to enforce their lien rights. This means, depending on the choices you make in your bankruptcy case, you may have to give back your car or vacate your home. In order to get results that work for you, us now at (916) 485-5444 to schedule your free attorney consultation.