What are the potential consequences of a failed debt settlement?

If you are unable to complete a debt settlement successfully in California, there are potential consequences that you should be aware of. Firstly, if the settlement agreement fails, then you will be responsible for the full amount of your debt. This means that you must pay the full amount of the debt plus any interest that has accrued since the last payment. Secondly, not paying off the debt could lead to a negative impact on your credit score. If the debt goes to collections, your credit report will reflect this and will cause your score to drop significantly. This could result in difficulty obtaining credit for other purchases in the future. Thirdly, if you fail to settle your debt, the creditor or debt collector may take legal action against you. This could mean that you are sued by the creditor or debt collector and a judgment is issued against you. This could result in wage garnishments, liens on your property, or other financial punishments. Lastly, if the creditor or debt collector wins a legal judgement against you, this judegment will remain on your credit report for a period of seven years. This negative entry on your report could further reduce your credit score and result in difficulty obtaining credit in the future. In conclusion, failing to settle a debt can have serious consequences, therefore it is important to keep up to date on payments and try to negotiate a settlement with the creditor or debt collector.

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What are the potential consequences of a failed debt settlement?

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