Miss a payment, what can happen?
Situations may arise that prevent you from honoring a written contract that you have signed.
If you owe more money than you can pay, there are alternatives such as working out agreements to pay back your debt over time, taking out a new loan to pay back existing debts, or declaring bankruptcy.
However, the simple fact is that if you miss payments you can be sued. Many contracts provide that if you miss one payment, the entire debt becomes immediately due and payable. If you do not answer, you will lose by default.
If you lose, a "judgment" will be "entered against you," which means that your income can be "garnished" (that is, your money can be taken to pay the debt because garnishment takes the debtor's money from sources other than the debtor; i.e., employer, bank, etc.) or other actions can be taken to collect the money from you. Interest is added to the amount of the judgment.
There are limits to starting a lawsuit or being sued. Illinois laws create deadlines, called "statutes of limitation," for starting lawsuits or making claims. Some deadlines are very short. If you think you have a possible claim or lawsuit, you should promptly talk with a lawyer and ask what time limit applies.
Bankruptcy is a formal court proceeding which is very complicated. Your assets - the things that you own - may be taken (except for certain protected items), and most of your debts are canceled. Certain debts are not canceled; however, and include debts for fraud, tax debts, debts that you did not report to the bankruptcy court, debts for intentional or malicious harm, debts that are imposed as part of a sentence for criminal and/or traffic conduct, child support and debts for school loans.
Note: This information was prepared as a public service by the Illinois State Bar Association and is a joint project with the Illinois Press Association. Its purpose is to inform citizens of their legal rights and obligations.
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If you have questions about the application of the law in a particular case, consult your lawyer. The law is constantly changing. Information on this site or any site to which we link does not constitute legal advice.