What Happens When You Don't Pay Your Bills?

Written by tom ryan
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What Happens When You Don't Pay Your Bills?
If you don't pay your bills, your creditors may sue for payment. (Paying Bills image by ne_fall_photos from Fotolia.com)

Falling behind on your bills can be an easy thing to do. Perhaps your hours at work were cut back, your spouse lost his job or you suffered a long-term illness. These and other unexpected issues can make it difficult or impossible to pay your bills on time, or at all---though you have options for getting caught up and reconciling debts, if you simply avoid them, you could face serious trouble.

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Utility Bills

If you neglect to pay your utility bills, like a phone or gas bill, the company that provides the service will send you past due notices. If you continue to ignore the bill and do not make payment arrangements with the service provider, your service will likely be shut off until you pay your outstanding balance.

Creditors Start Calling

If you don't pay your credit card bills, the credit agency is going to call you looking for payment. They cannot forcibly take your money---they will simply harass you to try and get you to pay. If you continue to ignore your bill, they will report you to a credit bureau, damaging your credit score, and eventually they will pass off the debt to a collection agency.

Collection Calls

When a company tires of calling you for payment, they may pass off the duty to a collection agency---this is an independent company that contacts you for payment and receives a percentage for its services. They will contact you much more often than the original creditor did, but eventually even the collection agency may tire of the effort and simply sue you.

Court and Payment

If the court decides that you must pay your debts and you do not have the money, you may be forced to surrender assets---your personal belongings---to pay off what you owe. There are limits to what can be seized---for example, they cannot take your Social Security, child support payments or other protected assets.

If You Die

If you don't pay your bills and then you die, your debt doesn't always disappear. The debt may be passed off to your estate, meaning that what you had in your possession when you died will be used to pay off your debts. If you did not own enough assets to pay off the debt, then the remaining debt is written off by the creditor---creditors cannot force your heirs to "inherit" the debt.

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