What happens if a debt settlement is not completed on time?

When a debt settlement agreement in Hawaii is not completed on time, the consequences depend on the type of debt that has been settled. For example, if it is a secured debt, the creditor may have the right to repossess the item or property that was used as collateral. In this case, the borrower would have to pay the full amount of the loan to reclaim the property. In the case of an unsecured debt, the creditor may take the borrower to court and obtain a judgment. This means that if the borrower does not comply with the settlement agreement, the court may order wage garnishments, liens, or asset seizure. Furthermore, when a settlement agreement is not completed by the agreed-upon date, the creditor may report the unpaid debt to the major credit bureaus. This will damage the borrower’s credit score and make it more difficult for them to obtain credit in the future. Finally, it is important to note that debt settlement can have serious tax consequences. The IRS considers debt that is forgiven as taxable income, so the borrower could be held responsible for paying taxes on the forgiven debt. In conclusion, failing to complete a debt settlement on time can have serious and long-term consequences, so it is important to keep up with the agreement and make sure that all payments are made in a timely manner.

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What happens if a debt settlement is not completed on time?

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