What happens if I offer a repayment agreement and break the agreement after a few months?

UPDATED: Jan 10, 2012

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What happens if I offer a repayment agreement and break the agreement after a few months?

I was told that they could not come after me, again since the agreement was established with the company.

Asked on January 10, 2012 under Bankruptcy Law, North Carolina


S.L,. Member, California Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

If you and the company sign a repayment agreement, you have entered into a contract.  If you don't comply with the terms of the contract, the company can sue you for breach of contract.  If the company gets a judgment against you, it can enforce the judgment by a wage garnishment, placing a lien on your property, etc.

If you enter into a repayment agreement with the intention of breaking the agreement, you could be liable for fraud.

Instead of entering into a repayment agreement  which may be unaffordable, you might want to consider filing bankruptcy if the company gets a judgment against you for the amount you owe.  It would be premature to file bankruptcy until there is a judgement against you.  Depending on your income and other factors, you may be eligible to file Chapter 7 bankruptcy which is straight liquidation that eliminates your debts.  If you are not eligible for Chapter 7, you could file Chapter 13, which requires a plan (budget) for repayment of creditors.

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