If I took out an online loan and did not pay it back, what could happen?
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If I took out an online loan and did not pay it back, what could happen?
To pay back the loan, money was to be automatically deducted from my checking account. I closed the checking account. I would like to know what could happen.
Asked on June 4, 2012 under Bankruptcy Law, Texas
Answers:
M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
First of all, you cannot be threatened with arrest for non-payment of a loan. In this day and age people no longer go to jail for owing money; debtor's prison is a thing of the past. Owing a debt is a civil not criminal matter. The exception to this would be if fraud was committed in obtaining the money. So, for example, if you borrowed money with no intention of paying it back then that would be a crime.
The fact is however that you still owe the money. So do your best to make repayment arrangements. Unless you can, you will end up in court if they pursue collections activity, which they probably will. If this is a large debt then declaring bankruptcy to discharge it might be a good option; if the amount owed is small try to reach a settlement because if you can't a judgement will be issued against you. At that point certain of your assets can be attached and/or your wages and bank accounts garnshed.
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