In some states, you could have your wages garnished or have your assets confiscated. This means that any short-term good feeling you get from paying for university can soon be lost if you’re hit by all subpoenas, etc., that result from canceling the debt check (and the potential loss of assets such as cars and homes). Also keep in mind that while the debt audit is designed to reduce debt slowly, it is primarily designed to ensure that you have enough for the basics each month. The debt check requires you to pay every month (or make a catch up payment, or go to court and apply for a delay in payment).
What happens if you miss a payment for the debt check?
The debt counselor did the math a while ago and knows that you should be able to make the payment if your income and expenses go as planned. If you lose your job, you can get a letter saying that and ask your debt advisor to contact lenders and ask for a brief deferment of payment (they don’t have to but they can). You’re in for a rough ride because you’re falling for the scam, and it’s going to make life a bit difficult for a while, but with the help of your debt counselor, you should get through this.
What happens if I refuse to pay from a collection agency?
Collection agencies are currently under no obligation to advise you that they cannot sue you or legally file your credit report if you refuse to pay any out-of-date debts. In this case, the court issues an order (known as a defaulting judgment) which requires you to pay the debts and legal and collection fees of the collection agency. Other collection agencies immediately buy debts from lenders and then try to collect money from borrowers.
References:
- https://www.debtbusters.co.za/articles/what-happens-if-you-just-dont-pay-ever/
- What Happens if You Can't Pay Your Debt Review Repayments?
Barry Ritholtz is a renowned finance expert, author and blogger. With over 30 years of experience in the financial industry he has gained a reputation as a thought leader and influencer in the investment community.