What can happen if I don’t pay my debts but don’t file bankruptcy?

Every case is different, but creditors generally follow similar patterns in attempting to collect a debt. At first they will contact you by mail and then by phone. If they are not satisfied with your response they will refer you to a collection agency which will also mail and call you, often more aggressively. Collection agencies can become abusive, making threats and even contacting relatives and neighbors in an attempt to embarrass you. If unsuccessful in collecting, the creditor or the collection agency will then file a lawsuit against you. You may fight the lawsuit if you wish, but the cost just to file a legal Answer to the Complaint can run up to $370 or more. If you do not file a legal Answer to the Complaint within 30 days after you were served, the creditor can then take your default and obtain a judgment for whatever amount is demanded in the Complaint. The creditor can then—

  • Use the judgment to garnish your salary or bank account;
  • Record the judgment to create a lien on your house; and
  • Request an order that you personally appear in court to answer questions about your income and assets.