You might want to realign your viewpoint if you think you are one of only a few struggling with overdue debt. In reality, about millions of other Americans are in a similar situation.
To those who lack the resources to pay their debt, it is tempting to ignore the matter and hope it will disappear. Unfortunately, that is unlikely and could substantially worsen your overall circumstances. Here are only two things that could happen if you do not address your debt.
Damaged credit score
As you may know, a credit score is a number that lenders use to assess creditworthiness. Unpaid debt is reported to credit bureaus as a “late payment” or “default.” When this happens, your credit score will fall and make it almost impossible to obtain a loan or credit card in times of need.
Increased financial hardships
Your creditors have the right to sue you for what you owe them. If you lose the lawsuit, they may obtain a judgment to garnish your wages or seize your property. Unfortunately, this could jeopardize the money you need to survive.
Another reason to address debt instead of ignoring it is that it could impact your income and housing. Many employers and landlords in today’s world routinely run a credit check on prospective workers and tenants. If you have unpaid debt on your record, you could find it hard to get a job or a new residence.
The inability to pay off debt paralyzes many Americans, so they do nothing, hoping the problem will fade over time. A wiser approach is to explore your options and learn how chapter 7 and 13 bankruptcy works in New Jersey.
