Last Updated on April 19th, 2023 at 04:37 pm
It can be incredibly stressful when you find yourself unable to meet your loan repayments. You may become worried about how you will support yourself or your family financially. There are nonprofit credit counselors, bankruptcy attorneys, or legal aid centers that can help you find out more about your options and plan for a better and brighter financial future.
What To Do If You Can’t Meet Loan Repayments?
When you realize that you will be unable to afford a scheduled loan repayment, you should immediately contact your lender. Your lender will try to find an agreement that makes it feasible for you to repay the loan. You may be able to agree to a more affordable repayment plan. In certain situations where you are unable to repay your loan, claiming bankruptcy may be a relevant possibility. Declaring bankruptcy should always be discussed with a professional.
What Will A Payday Lender Do If I Cannot Repay My Debt?
A lender may take multiple actions in response if you cannot repay your debt. They can choose to enforce wage garnishment, lawsuits, and debt collection. While it is very rare and only in extreme cases, jail time can also be given for failure to repay money owed. Following the agreed loan period, the lender may implement one or more of these actions to obtain any unpaid funds. They could instigate automatic withdrawals from your bank account, which could result in added bank fees for yourself. Lenders can also set up wage garnishment in which a portion of your wages is withheld and sent directly to your lender.
Will I Be Taken To Court Over Unpaid Payday Loan Debts?
A lender that you are indebted to will try to create an alternative payment arrangement that suits both parties. If a client is uncooperative or refusing to pay, they may be taken to court. Many lenders will even take cases to court over a relatively small amount of money to get the money they are owed.
If you are summoned to court, make sure that you show up! Never ignore a lawsuit. Often, lenders automatically win cases because clients do not attend court. Whatever your circumstances may be, it is always in your best interest to show up to a court date.
Will I Go To Prison Because Of My Payday Debt?
In most cases, you do not need to worry about going to prison for failing to repay a loan and this includes payday loans and installment loans too. Some forms of debt may land you in jail if you fail to meet repayments. These include criminal fines, council taxes, business rates, and Child maintenance. If you haven’t managed to pay a payday loan repayment on time, you may fear that you are facing jail time, but in the vast majority of scenarios, this is not the case.
Failing to repay your payday loan will negatively affect your credit rating, making it more challenging to borrow money in the future. If you do land in debt, consider whether you have any way to settle it to avoid dealing with the repercussions. If you have failed to meet the agreed-upon payments on time, your loan will continue to gather extra interest making the debt difficult to manage.
If you are struggling with your debt and need help, remember that there are nonprofit credit counselors, bankruptcy attorneys, and legal aid centers that can explain your options to you. Get proactive in dealing with your debt today and begin to plan for a better and brighter financial future!
