When it comes to money and loans, there are a variety of issues that you’ll want to avoid. For instance, if you can’t pay for debts that you’ve accrued, you should definitely call the lender and inform them of hardships, but when that doesn’t work, and you are dealing with problems associated with your financial outlook, do not stop paying and think everything will get resolved in time. If you do not pay for a long period of time, and you do not inform the lender, you will be subject to penalties, fines, fees, and worst of all, you could go into default. This is one of the biggest things that you will not want to deal with at all, and there are several reasons why.
Before we can get into the issues that this could cause, it is important to understand what the term means and how it is determined within the structure of a financial portrait. When owing money and you do not pay it back, it goes into this status, which means that the holders of the initial contract are in full rights to sue in order to get the money back. This is often times seen with longer term lending such as student loans, which can take upwards of 30 years to pay back. The same can be seen in mortgages that are often times required to pay back within the framework of 15 to 30 years at a time as well.
There are several issues that you could end up dealing with that is associated with a long-term non-payment of a loan. Some of the issues that you could end up dealing with include:
· Payment – You will owe the entire balance, and could lose all rights of repayment in increments, which can prove to create a great deal of stress for you and your family. Wages could be garnished, your reputation ruined, and a collection agency could end up with your debt.
· Taxes – The federal government could come after any and all refunds that you receive on your taxes. That garnishment will not be easy to deal with if you are accustomed to getting money back every tax year.
· Garnishments – Your employer might be contacted and the lender could ask for your paychecks to get garnished until the money is repaid. This follows you for a lifetime, in some instances.
· Credit History – As in the aforementioned, your credit score will take a major dive and reestablishing your name will be extremely difficult for a long time. You may have to deal with issues upwards of 10 to 15 years after the fact.
The above are just some of the issues that you might encounter, depending on the type of loan that is not paid back. This usually takes time, however, so if you miss one payment and you land in the default stages, you may not have to face the preceding. Usually after a debt has been unresolved for hundreds of days or more will this become serious. Some debts will not be able to be forgiven through bankruptcy, so it becomes important to investigate what terms and services you need to avoid any problems with the notion of borrowing money.