Often in counseling people in financial difficulty, I get the question, “What happens if I just ignore it? What can they do to me?” It’s a good question, and the answer depends on your situation. If you don’t pay a bill, a creditor has various options. Generally, a creditor will sit on a debt for a while to see if you will make good on the debt, but if enough time passes, the creditor will probably sue you, or sell the debt off to a debt collector who will then sue you.

When a creditor sues you, it has to serve papers to your last known address and give you time to respond. If you don’t respond, once enough time has passed the creditor will obtain a judgment against you. Once the creditor has a judgment then they have various options. First the creditor can garnish your wages. This means the creditor will take up to 25% of your paycheck. If a creditor determines that you have money in a Bank Account then they can get a court order to seize the money in that account. The creditor may also decide to place a lien on your property, which could impair your ability to get a clean title to a vehicle or a house.

If you have been sued by a creditor, it’s important that you not ignore it. It may be much easier to deal with the situation when it arises rather than when your payroll company tells you your next check will be garnished. If you have been sued, consult with an attorney so that you may determine the best way to handle your situation.