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What happens if you don't pay debt? (Can IGNORING DEBT make it go away?)

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If you’re thinking of ignoring your debt then it’s vital you understand the risks of ignoring debt and how it can impact you now and in the future.  Simply ignoring your debts can lead to a world of issues, and it can impact your life more than you might ever imagine. Ever wondered what happens if you don’t pay debt?  Read on to find out!

What happens if you dont pay debt (Can IGNORING DEBT make it go away)

What happens when you don’t pay your debt?

Debt is a very personal issue that can seem overwhelming at times. If you're thinking about ignoring your debt, you should consider the consequences of not paying it.  Here are some of the things that could happen if you choose to ignore your debt and stop paying it without letting your creditors know or finding another solution.

Your credit score will disintegrate

One of the most notable issues that you can expect as a result of debt that is not being handled appropriately is a terrible credit score. Your credit score is so important for your financial health, as it’s something that any business or organisation will check before permitting to start a relationship with you. For example, no mortgage broker is going to be willing to provide you with a mortgage if you have a bad credit score, as they will not have sufficient trust in your ability to make repayments. The same goes for loans and even leasing opportunities such as cars on finance, as having a bad credit score gives them the impression that you are not financially responsible and cannot be relied upon. The only way to heal and repair your credit scores is by resolving your debts and proving yourself to be a respectable person with good financial security.

Your debt will grow 

When you ignore your debt, it’s more than likely that it will continue to grow. Many debts have an interest rate so if you don’t make a payment, the interest will still be added and you’ll owe more over time.  Also, if a company has to do something like sending out a letter to remind you to pay up, then may also likely charge you for this too, as well as late payment or non-payment fees. The longer that you leave your debt the worse it’s going to become. A small debt could become even more unmanageable in just a few months with all the extra interest and charges.  Getting debt help as soon as you realise that you can’t pay the debt you owe is always the best course of action if you want to protect your financial future and prevent things from escalating out of control!

Bailiffs may come knocking 

Unfortunately, a big risk of unresolved debt is the likelihood that bailiffs will come knocking, as many companies hire out specialised teams as a last-ditch attempt to try and get back some of the money that you owe them by taking your personal belongings. This might mean that they seize your car from you, or even come inside your house and take things such as your television and laptop to sell at auction so that they can recoup some of the funds that you have failed to pay back. Opening the door to find a bailiff with a notice stating their intentions to take your belongings would no doubt be an extremely stressful experience that will keep you up at night.

The risk of unmanageable debt on your health

Stress can be caused by a number of factors, but one of the most common is debt.  Debt is a big cause of stress for many people. It can affect your health, relationships, and work. It can make it difficult for people to enjoy their spare time or even live comfortably.  If you are struggling with debt and want to feel better, there are steps you can take to reduce the stress and get back on track with your finances.

“Mental health problems can make it harder to earn and manage your money, and debt can trigger or worsen conditions such as anxiety, depression and stress.” -

But I can't pay my debts what options do I have?

Debt is a difficult thing to deal with, especially when you're in the middle of it. The first thing to understand is that there are many options available to you as a debtor, and you need to know what each option entails.  You should never simply stop paying your debts, as it can lead to a world of issues both now and in the future as explained above.

Here are your options when you can’t pay your debts:

  • Talk to your creditors

Many creditors will be willing to help their customers who are in financial difficulty.  If it’s a temporary issue then they may be able to freeze the interest for a short while, or even offer a repayment holiday, especially if you’ve always normally paid on time.

  • Contact a debt charity helpline

There are lots of charity helplines and services that can help with advice and support for free.  Even the Citizen’s Advice is a great place to start and they can signpost you to reputable debt companies that offer the support you need for free.

  • Set up a debt management plan

A debt management plan might be a great solution if you are able to pay back your debt in five or less years with a regular monthly payment.  Companies like PayPlan are free to use and can help negotiate a repayment schedule with your creditors on your behalf, taking some of the pressure off you.

  • Opt for an IVA 

If your debt is larger and can’t be paid back in around five years then you may be suggested an IVA as an option.  You pay back some of the debt and the rest is written off.  It will have consequences for your credit rating, so if you can pay back all the debt then an IVA isn’t the best option.

  • Only choose bankruptcy if it’s the only option

If you have no way at all to pay back any of your debt then bankruptcy may be an option.  This option needs to be considered with great care as it will severely affect your credit score and will need to be declared for all sorts of reasons in the future, such as obtaining credit and even for some job roles.  It can negatively affect your financial future for a long time, so research this and seek professional advice about whether this is truly the best option for you. 

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Understand the risks of taking on debt

Before you take on any debt it’s important to understand the risks of borrowing money.  Although you can’t guarantee what will happen in the future with your financial situation, knowing the consequences of taking on debt that you might not be able to repay could prevent a bad financial situation from ever occurring.

​​Make sure you budget for debt and can afford it easily out of your current budget without it affecting your essential living costs.  Debt should be manageable and not a burden to your finances and as we saww above, your health.

How to manage debt and pay it back quicker

With the right strategies, you could pay off your debt faster and avoid accumulating more debt in the future.

Managing debt and paying it back quicker can be difficult, especially when you're struggling to put food on the table.

There are many ways that you can pay off your debt faster. Some of these methods include:

  • Increasing income by working more hours or getting a second job

  • Cutting down on expenses and finding cheaper ways to do things

  • Making a strict budget and sticking to it

  • Use a credit card with a low interest rate or zero percent balance transfer rate

  • Always pay more than the minimum payment

  • Learn the benefits of overpaying a loan

  • Learn smart ways to use a credit card

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Make more money to pay back your debt quicker

There are lots of ways to make more money that can in turn help you to pay back borrowed money quicker.  Here are some examples of where you can find methods to make more money on this website:

Final word

Ignoring your debt is certainly a risky business that you should never choose to do. You are playing with fire when you ignore your debts, and you will eventually get burned. There are lots of companies and resources to help you when you are in financial difficulty and struggle to afford your debt repayments.  Make use of these and you will find a solution without getting into further debt or financial difficulty.

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