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Drowning under debt or bombarded by bills? Seek help

One of the many things that could happen if you can’t pay back debt: repossession.
One of the many things that could happen if you can’t pay back debt: repossession. File photo

Despite what you may think, debt has no generation. Baby boomers, Gen Xers and millennials are all wrestling with debt in some capacity, and the stats are all pretty similar. Across the board, the average is about 80 percent of people in each generation who live with debt as a reality.

The culprits range from mortgages to auto loans to medical debt and student finances. Once you consider the billions owed nationwide, it can be easy to think that your measly hundred grand may be a drop in the bucket that could go unnoticed. However, there are significant consequences to failing to pay back debt in any amount.

Late fees and higher interest rates

Yes, it seems a little counter intuitive to slap fees and higher rates onto a person who isn’t giving you any money at all, but it’s the first way that a lot of loan-granting entities will gently show that they mean business in pursuit of their repayment.

Debt collection

After 60 days without any payment, your case will be sent to a collection agency. They will call and pursue persistently for 180 days; at that time, your debt will be declared “unlikely to be paid” and will return to the creditor to determine how to proceed.


A creditor has the option of suing the responsible party, regardless of the amount of debt. In some cases, the result of a loss in court means garnishment of wages, starting with your tax refunds, paychecks and for a few debts, even Social Security.


If you’ve borrowed for a home or car, the lender could take back what they’ve lent the money for.

Destroyed credit score

It has been said that refusing to pay debts can be as detrimental to your credit score as declaring bankruptcy. Not only is it incredibly difficult to regain a good credit score but building financial peace on a low credit score can also be a mental and emotional strain.

The statute of limitations on debt can affect the amount of time the courts are legally allowed to force debt repayment. However, it doesn’t protect you from being sued by your creditor, clean your credit report or forgive the debt. You still owe the creditor what you borrowed.

Stranger things have happened than a creditor giving up and taking the loss in stride, so while it does happen, it’s best not to bank on that as a solution to your debt. If you feel like you’re drowning under debt or bombarded by bills, seek financial advisement from an institution you trust and start getting back on track.

Kat’s Money Corner is posted on Dollars & Sense every Tuesday. Kat Hnatyshyn, when not blogging or caring for her little ones, is a manager with CommunityAmerica Credit Union. For more financial chatter, visit