The Worst That Can Happen When You Don’t Pay Off Debt
Not too long ago, those who were unable to pay off debt faced a cruel and sometimes deadly fate: debtors prison. Or indentured servitude.
Why deadly? Because up until the mid-19th century prisoners often died in debtors prison – if their families didn’t bring them food in prison, they literally could starve to death. And disease ran rampant in debtors prisons, claiming many former businessmen who were unfortunate to face a streak of bad luck.
These days, fortunately, there is no such thing as debtors prison.
However, those who do not pay off their debts still face consequences.
First of all, if you have incurred a debt and do not make your payments on time, your creditors can report you to credit agencies, which will make your credit rating plummet.
This will make it hard for you to get credit, which will make it hard for you to buy a car, get insurance, buy a home, rent a home or get a cellular phone. And you will have to pay higher deposits for many services, like utility services.
If you continue not to pay off your debts and do not work out a payment plan, you face some serious consequences. You could lose your home to foreclosure. Your creditors could get a judgement against you and your property could be seized by the sheriff’s office and auctioned off. Your vehicles could be repossessed.
You could even be forced into bankruptcy against your will under certain circumstances.
So don’t ignore your debts, because even though debtors prisons no longer exist, there are still serious consequences to ignoring your financial obligations.