Consequences for Debt May Not Be as Dire as You Think
If you’re constantly being called by debt collectors, have you ever wondered what would happen if you simply cannot afford to pay? In this article, we’ll talk about what happens with your debt once it’s been handed off to a collection agency.
No Debt is the Same
This may surprise you but there’s no universal answer to what will happen to your debt if you cannot pay. In other words, every debt is different and carries with it different circumstances, including how much debt there is, how old is the debt, the practices of the lender, etc. For example, some creditors may threaten to sue but rarely do so. According to most experts, the chances of you being sued actually depend primarily upon two things:
- How much you owe
- Is it worth the creditor’s trouble to come after you
Will You Have to Pay All of It?
Generally speaking, if an account has gone unpaid for six months, most creditors will be in the mood to settle for a payment that is a portion of the total unpaid balance. Your best bet for success is to offer a lower lump-sum payment or get on a monthly payment plan. While it’s usually a good idea to pay your debts, paying a debt in full may actually put you at further risk with other necessities, like rent or mortgage, food and utilities. Credit card companies are notorious for being reluctant to negotiate, but they will allow negotiations from third-party collectors – usually after an account is three or more months past due.
Does it Make Sense Not to Pay Your Debt?
If your debt is years old and you’ve not been sued, it may be in your best interest to do nothing at all. That’s because most of the negative information on a credit report will go away after seven years. Also, if your debt is multiple years old, it’s probably been bought and sold by so many different collection vendors that it may be difficult to find out who legitimately is responsible for owing the debt.
Not Sure What to do About Your Debt? Call The Oswalt Law Group
If you’re being harassed by collection agencies about debt, and you don’t know where to turn, call us here at The Oswalt Law Group. There are a host of options available to you, and we invite you to call us for a free initial consultation. Our number is (602) 225-2222.