What can happen if you fail to repay a debt in a timely manner?

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What can happen if you fail to repay a debt in a timely manner?

I owe a company some money. I have asked them if I could pay back $500 a month and they said no. They need a substantial payment initial of $10,000 and then I can pay back in installments. If I don’t give them the substantial payment they are going to start taking things out of my house and the shop I have had for +40 years. Is this right; can they do this?

Asked on June 16, 2011 under Bankruptcy Law, Florida

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

1) A creditor is not obligated to take payment over time, unless there is an agreement to that effect. If you owe the company money, they may insist on payment at once--or in the alternative, since they have the right to get it all at once, may put forward a payment plan on a "take it or leave it" basis, like the one they've put forward.

2) If you don't repay the creditor according to terms the creditor agrees to, the creditor may take legal action and sue you.

3) The creditor *cannot* simply take belongings out of your home and shop unless--and only to the extent that--you have given them permission to do so (i.e. provided your belongings or inventory as security or collateral in form or another).

4) However, if they sue you and win, and you still  don't pay, the creditor can then look to other remedies, including putting  a lien on property, garnishing wages or bank accounts, or forcing a sale of some of your property.


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