What Happens If You Don’t Pay Off Debt?
Are you struggling to pay credit card or utility bills? Are debt collection agencies knocking on your door? Then you might be wondering what happens when you don’t pay debt.
Not paying your debts as and when they fall due can have serious personal, financial and legal consequences for years to come. However, there are many options available to individuals in financial difficulties, including debt management plans, debt relief orders and individual voluntary arrangements.
In this article, we explain what happens if you don’t pay off debt.
What Should I Do If I Can’t Pay My Debt?
If you can’t pay your debt, the worst thing you can do is ignore it. It’s not easy admitting that you’re in financial trouble, but the sooner you do so, the more options there are available to you.
If you are struggling to pay your debt, then the first step is to contact a licensed insolvency advisor. They’ll be able to provide multiple options that could help you reorganise your debts, consolidate debts, or negotiate new terms with creditors.
The major options available to individuals include:
- Debt management plans
- Debt relief orders
- Individual voluntary arrangements (IVAs)
- Debt consolidations loans
What Happens When You Don’t Pay a Debt?
But what happens if you don’t pay a debt? If you default on your payments, then your creditors are likely to follow an established series of procedures in an effort to recoup the money you owe. This typically starts with requests for payment, but if the debt goes unpaid, you could end up in court.
Creditors often take the following steps when debts are left unpaid:
- The creditor contacts you and asks for payment.
- Your debt may be passed to a debt collection agency that then pursues you for payment on behalf of the creditor.
- The debt collection agency may send bailiffs around to your property in order to secure goods in lieu of missed payments. This typically happens if you have secured debt, when they could repossess your car or even your home.
- The creditor takes you to court and pursues a CCJ (country court judgment) notice against you.
- The creditor asks the courts to issue a bankruptcy order against you in order to recoup their losses.
If your creditors are forced to take you to court, you could face a CCJ or bankruptcy, which will impact your credit rating for years to come. Before this happens, it’s important for you to contact your creditors and attempt to renegotiate the debt.
Contact Irwin Insolvency to Find Out More About What Happens if You Don’t Pay Off Debt
If you’re struggling to pay your bills, then Irwin Insolvency’s expert team is here to help. Our experienced financial advisors can explain what happens if you don’t pay off debt, and we’re ready to provide you with the assistance you need to resolve your personal debt problems – from expert debt advice to debt management plans.
Contact Irwin Insolvency today for more information.