Now, sometimes, when you get your loan maybe you do have the means to pay it off in a certain amount of time, and then life happens. You lose your job, or maybe your spouse loses theirs, and now you have far less income coming in and you still have those loans looming over your head. If you had a good savings account set up, with at least three to six full months of bill worth saved, you might be alright, but if not, here’s what you may face.
Go To Court
If you owe someone some money, and you’re pretty far behind, they might take you to court. In court, unless you can somehow prove you don’t owe them that money, you’ll probably lose. But that doesn’t mean you’ll have to pay them a full lump sum right there. They may set up a payment plan, or even set up garnishment payments.
Garnishment is when a certain amount of money is taken directly from your pay to pay off someone you owe money to. There is usually a percentage they are allowed to take, in order to leave you with enough money to live on.
If you have gotten into a great deal of debt due to unpaid bills and loans, you could very likely find yourself facing bankruptcy. There is a lot that goes into filing, and it is really important to talk to a lawyer that specializes in bankruptcy so that you make sure it is the right option for you.
Inability To Get Loans Again
If you have accumulated too much debt, and haven’t been doing much of anything to pay it off, it will affect your ability to get loans, credit cards, and you may never be able to buy your own home or even a new vehicle. You may find some high interest rate options, or you could still opt for payday loans and other similar types of loans, which will help when money is tight.
The smart thing to do is to simply pay off your loans, on time. If you know you might have a problem doing so, don’t get a loan! Instead, if you find money is tight, see if you can borrow from a family member or start a crowdfunding campaign that you won’t have to pay back.