When you don't pay your debt, debt collectors and collection agencies can both report your debt to credit bureaus and pursue legal options.
These legal remedies can include filing a lawsuit in either state or federal court; obtaining a judgment; and any attempts to collect on judgments.
If you do not pay your debt you could face:
- Wage garnishments
- Bank garnishments
What Property Can Creditors Repossess?
Secured property can be repossessed and sold at auction. Secured property is any property paid for by a loan. The two most common examples of this are a home that goes into foreclosure and a vehicle that is repossessed.
In these situations, a creditor can also choose not to repossess the property and sue you instead for the full amount owed. Often, a property that is repossessed is sold at an auction for less than what was remaining on the loan balance.
The difference between what the property was sold for and what was owed on the loan is called the deficiency balance.
You are still responsible for this amount, but the deficiency balance is no longer a secured debt.
Are You Unable to Pay Your Debts?
It can be incredibly stressful to struggle to make ends meet. If you are unable to pay your creditors due to financial hardship, it might be time to consider your options. Attorney Joseph p. Doyle can help you evaluate whether filing for bankruptcy is the best option for your financial situation. During your consultation, our Chicago bankruptcy lawyer can go overChapter 7 and Chapter 13 bankruptcy as well as bankruptcy alternatives.