What happens if I default on a debt repayment plan?

Defaulting on a debt repayment plan in Pennsylvania can have serious consequences. Depending on the type of debt, lenders can pursue a variety of remedies. If you default on a secured loan, the lender can repossess the property used as collateral for the loan. For example, if you purchase a car with a loan and are unable to keep up with the payments, the lender may repossess the car. Unsecured loans, such as credit cards, are more difficult to recover through legal means. In these cases, the lender can seek a court judgement against you, and can garnish your wages or bank accounts to recoup the debt. If you fail to appear in court, the judge may automatically enter a judgement in favor of the lender. Additionally, you may face criminal charges for writing bad checks or other types of fraud. In some cases, lenders may even bring criminal charges against debtors. Defaulting on a debt repayment plan can also have serious implications on your credit rating. While the court judgement will remain on your record for years, late payments or defaults may remain on your credit report for seven years. This can make it difficult to qualify for new forms of credit, such as loans or mortgages. For any type of debt, it is important to keep up with payments and to make sure that you understand the terms of your agreement. If you are unable to make payments, contact your lender to discuss other options that may be available. It is important to keep in mind that the lenders do have the right to pursue legal methods of recovery if you fail to fulfill your obligations.

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