What happens to me if I am unable to finish paying for my pool loan?
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What happens to me if I am unable to finish paying for my pool loan?
I am looking to purchase an inground pool which is going to cost me about $25,000. The problem is that there is a possibility that my job may merge with another company in another year or so. If that happens, I could be out of a job. What would happen to my loan, my credit and my house? I just need to know what the ramifications are behind not being able to pay back the amount of the loan.
Asked on March 15, 2012 under Bankruptcy Law, Arizona
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
1) You could be sued by the lender for the return of the money, if you default on the loan and do not pay it as per the loan's terms. Once you default, they can sue to get all the money at once--they are not limited to suing only for the payments you've missed.
2) If they sue you and win--which they likely will, in the case you describe--and you still don't pay, they may do one or more of the following: a) put a lien on your house; b) garnish your wages; 3) execute on personal property (e.g. have vehicles, televisions, etc. seized and sold); 4) levy on a bank account (have money taken out of your account).
3) They can pursue any other rights the loan agreement gives them--that is, for example, if any property was put up as security or collateral, it could be repossessed or foreclosed.
4) Your credit history/rating will be badly damaged, which could impact getting another job (some employers look at candiate credit history). The amount of damage will probably be around 200+ points off your rating. (It's hard to say for sure; the rating agencies keep their formulas very close to their vests.)
In short, if you fear losing your job, do not take out a significant loan.
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