Americans have more debt than ever before. As of March 31st of this year, American households collectively held $12.73 trillion in debt, surpassing the record $12.68 trillion reached in 2008.*
Student Debt
Federal
If you are unable to make a payment on your federal
student loan by its due date, you have a 270 day grace
period in which to pay. Every payment you miss will hurt
your credit score and impact your ability to borrow in
the future.
student loan by its due date, you have a 270 day grace
period in which to pay. Every payment you miss will hurt
your credit score and impact your ability to borrow in
the future.
Once this period is over, your debt goes into default and
the federal government is able to garnish your wages,
Social Security check and federal tax refund. Federal
student debt is typically handed over to third-party
collection agencies who charge penalties and fees —
as much as 18 percent of the balance.*
Privatethe federal government is able to garnish your wages,
Social Security check and federal tax refund. Federal
student debt is typically handed over to third-party
collection agencies who charge penalties and fees —
as much as 18 percent of the balance.*
"The only remedy that a private lender has is to sue
you, and they are suingyou under state law
and every state differs."*
Medical Debt
It's important to pay off medical bills as quickly as possible in order to protect your credit score. Insurance companies have been known to sue individuals for not paying medical bills, and 99.4 percent of medical debt is reported by third-party collection agencies who can be particularly aggressive.*
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If the claim does not have an error, experts suggest that you negotiate with your medical provider. Doctors can provide discounts for patients who are unable to make payments and some medical providers will offer financial aid options for low-income patients.
Housing Debt
According to GoBankingRates, "If you miss your
first mortgage payment, your lender will typically
offer you a grace period of 15 days. During these 15
days, you can send in your payment without being
considered delinquent."
first mortgage payment, your lender will typically
offer you a grace period of 15 days. During these 15
days, you can send in your payment without being
considered delinquent."
When this grace period is over, you will likely face a late
fee as high as 2 to 5 percent of the monthly payment
amount on your mortgage.
fee as high as 2 to 5 percent of the monthly payment
amount on your mortgage.
If you miss a second payment, your mortgage will likely
go into default. At this point, the U.S. Department of
Housing and Urban Development suggests that
borrowers take advantage of free housing counseling
programs.
go into default. At this point, the U.S. Department of
Housing and Urban Development suggests that
borrowers take advantage of free housing counseling
programs.
After 90 days, you will likely be served a Demand Letter
indicating you are delinquent on your loan. This is your
last chance to make a payment on your mortgage.
indicating you are delinquent on your loan. This is your
last chance to make a payment on your mortgage.
After missing four mortgage payments, the foreclosure
process typically begins. During this process, you have
the right to remain in your home. The lender will submit
a Notice of Default followed by a Notice of Sale. Within
21 days of the Notice of Sale, the house will be put up
for auction, at which point you must vacate.
process typically begins. During this process, you have
the right to remain in your home. The lender will submit
a Notice of Default followed by a Notice of Sale. Within
21 days of the Notice of Sale, the house will be put up
for auction, at which point you must vacate.
If you home is foreclosed, your credit score will be
severely damaged, but you will not likely face legal
repercussions.*
Auto Debtseverely damaged, but you will not likely face legal
repercussions.*
The Consumer Financial Protection Bureau explains
that if you miss payments on an auto lease, the
consequences are dependent on your specific contract.
If you miss a payment on your auto loan, you will likely
receive a Notice of Missed Payment within a few weeks.
that if you miss payments on an auto lease, the
consequences are dependent on your specific contract.
If you miss a payment on your auto loan, you will likely
receive a Notice of Missed Payment within a few weeks.
Depending on the specifics of your situation, your lessor
is then allowed to repossess your car so long as it does
not "breach the peace." The definition of this legal term
varies by state, but generally means your car cannot be
taken through physical force — if your car is in your
garage, the lessor cannot remove it from your home.
is then allowed to repossess your car so long as it does
not "breach the peace." The definition of this legal term
varies by state, but generally means your car cannot be
taken through physical force — if your car is in your
garage, the lessor cannot remove it from your home.
A lessor can, however, use a Starter Interrupt Device
(SID), which remotely deactivates a vehicle's ignition
system. Many states have found that remotely disabling
a vehicle does not "breach the peace."
(SID), which remotely deactivates a vehicle's ignition
system. Many states have found that remotely disabling
a vehicle does not "breach the peace."
Your contract and state law may give you the right to
"cure," or reinstate, your lease after you have missed
a payment. Check with your state attorney general or
consumer protection office to see if you have this right.
"cure," or reinstate, your lease after you have missed
a payment. Check with your state attorney general or
consumer protection office to see if you have this right.
If your car is repossessed, you may face a hefty
termination fee and your credit score will be damaged .*
https://www.cnbc.com/2017/08/10/heres-what-happens-if-you-dont-pay-off-the-most-common-types-of-debt.html?recirc=taboolainternal
termination fee and your credit score will be damaged .*
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