What Does Legally Happen When You Stop Paying Your Bills?

What Happens When You Stop Paying Your Bills

Whether you’ve recently lost your job, found yourself making less and less money recently or have just gotten fed up with the overwhelming number of bills getting sent to your home, everyone has thought about what would really happen if they stop paying their bills. Contrary to popular belief, there’s a good chance you won’t land behind bars if you stop paying your bills (provided the IRS is not involved). But there are many bad things that can happen if you stop paying your bills. Here are just a few:

1. Creditors can damage your credit report. If you miss even just one payment, a credit card company, student loan lender or other creditor can put a blemish on your creditor report. So you can imagine what can happen if you miss payments for several straight months. A creditor has the power to report you to the credit bureaus.

2. To reclaim their money, many creditors will often hire debt collection agencies to call you and correspond with you through the mail or via phone in order to get you to pay off your debt. Though you are protected by the Fair Debt Collection Practices Act, which makes it illegal for debt collectors to harass you at work or to harass your family, you’ll still receive plenty of calls from them. It can be a very unpleasant experience for you and your family when a debt collection agency gets involved.

3. Creditors can take you to court and sue you. Though it’s typically hard for them to force you to pay, you’ll incur legal fees and may be required by a judge to pay off your creditors.

4. You may eventually be forced to file for bankruptcy, which can hurt your credit score for up to a decade.

Alternatives To Stopping Your Payment Of Bills

Rather than getting frustrated by your bills, try and find ways to make it easier to pay them off. Bill consolidation (also referred to as debt consolidation) is one easy way to help you get back on track. Bill
consolidation grants you a loan that helps you pay off all your bills. Then, you’ll just need to pay down the bill consolidation loan, which typically carries a much lower interest rate and is easier to pay off. 

If you stop paying your bills altogether, you could ruin your financial future. It’s a good idea to consider other options before it’s too late.

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