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

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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

Answers:

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

Answered 9 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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