QUESTION
What will happen if I have a court date for an unpaid bank loan?
Asked on Jan 19th, 2014 on Bankruptcy - California
More details to this question:
I took a loan out from a bank for $3,900, discontinued making payments and now I have a court date soon. What are my options? I can't go to jail, can I? I'm a student and the only money I earn is from under-the-table work.
3 ANSWERS
No, debtor's prisons are a thing of the past, that is, unless fraud was involved. If you can't pay what you owe, you will get a judgment against you that will last indefinitely, earning 10% interest. If and when you find work, you will be subject to wage garnishment and an abstract of judgment can prevent you from buying, selling or financing real estate until the judgment is paid.
Answered on Jan 23rd, 2014 at 8:43 PM
Debt Collection Attorney serving Chicago, IL
Partner at
Edelman, Combs, Latturner & Goodwin, LLC
2 Awards
You cannot go to jail. If an original creditor is suing, you might want to settle, unless you are simply unable to. If it is a debt buyer that you never heard of, I would deny liability and see if they can prove that they even own the account.
Answered on Jan 23rd, 2014 at 8:42 PM
You can't go to jail, but this judgment will be around for many years. You either need to call them and get on a payment plan or try to settle the debt in one lump sum. Don't ignore it. The balance will go up at 10% a year until you pay it. It can also impact future job opportunities.
Answered on Jan 21st, 2014 at 3:25 PM