Going To Jail Will Debt Be Written Off

If I default on a payday loan will I go to jail?

Not a chance! Payday loan companies have zero leverage over you. Typically, when you formally applied for the loan via a website or store-front, you agreed to be contacted by phone, text and email. So, if you fail to pay them as agreed, get used to repeated contacts. After 90 days, your payday loan debt will be sold to a “serious” collection company for $.10 $.15 on the dollar. This company will “work you over” some more. You can revoke your agreement to be contacted. They cannot divulge your debt situation to your employer or any references you provided. Your debt will never go away. Frankly, if you owe a few hundred dollars that you borrowed in good faith, your life will be less frazzeled if you simply agree to a , you may be better off with a formal, written “extended payment plan.” No more addon fees. No interest. No increase in loan principal. Just $20/paycheck until you payback the principal.I know what everyone reading this is thinking! Jer is biased. Jer is a payday loan lender. Jer teaches others how to start a payday loan business. All this is true.However, if you borrowed $300 from Sheila’s payday loan store down the street, you should pay her back. Chances are, Sheila has kids, employees, bills, taxes… And YOU did agree to pay Sheila $45 for a $300 loan for a two week period.So… do what’s right! Take care of business and avoid bad Karma. And if you need $300 next year for an emergency set of tires so you can drive to work, you can return to Sheila’s Payday Loan store. Or, better, hit up your family first.Jer - Trihouse

I went to jail. Should I file for bankruptcy now? I went into serious debt?

The criminal record will most likely hinder you from finding a good job - the bankruptcy, not so much in my opinion. There are sectors in which you are not allowed to work, and usually they’ll have something to do with money. I went bankrupt in 2007 when I was 26 years old. 4 years later I was offered a position at a large bank in Australia. I needed to show a letter from my bankruptcy trustee (ITSA) that my bankruptcy was cleared before I was given the green light to be employed. Now I work in the area of Collections for the bank and deal with people like yourself daily. Speak to your creditors and ask them for a long-term payment plan. If the credit cards are already closed, more than likely there is no more interest being charged on them, and they should be happy to allow you to pay them off long term. Getting something out of you is better than nothing - and if you went bankrupt, they’d get nothing. I’m not sure how young you are - but think carefully about bankruptcy. I made the decision because it was financial damage caused by me, so I didn’t want my parents to bail me out. Plus I never knew I could approach my creditors directly for relief - banks like mine would rather you ask for help, than to go to these “debt relief” companies, which will sell you the idea of debt consolidation - it’s just a Part IX agreement in disguise, the step before bankruptcy. It still has the same stigma attached as full bankruptcy. Do your research thoroughly before making a decision. Speak to a Financial Counsellor. If you’re in Australia, use My Budget. They helped me a lot and taught me how to budget my expenses better.

Can you go to jail for not paying a car loan or home loan?

Not directly, but if a judgment is obtained against you, then the creditor has the right to attempt to collect on the debt by wage garnishment or seizure of assets. If this cannot be worked out in a mutually satisfactory way between the creditor and the debtor, the judge can order the debtor into court to explain the details of their financial position. If the debtor ignores the judge's order, or turns up but lies when they get into court, then they can certainly go to jail for that--but never just for not paying the debt. If the debtor turns up in court and (truthfully) states that they have no assets to pay, or admits to having some assets that, for whatever reason, are not practical for the creditor to seize, no jail time will be involved.Of course, in the case of secured debt like a car loan or a home loan, the creditor will first seize the asset that is securing the loan (the car or home). If the proceeds of the sale aren't enough--and they might not be if the asset is sold at a discounted price--to pay off the loan, the debtor is still liable for the remaining balance. The creditor can then go to court to get a judgment to try to collect on the remaining balance. Whether they do so will be at the creditor's discretion--if the debtor has few other assets besides the collateral that was seized, the creditor may just write off the rest of the balance as it wouldn't be worth their time to try to collect on it.

When a person goes to prison, what happens to their debt?

Practically speaking, they get written off as uncollectible.Accounts receivables (amounts owed to a company by customers) are evaluated based on the probability of them being collected.  If a customer has not paid their obligation within a reasonable amount of time, these accounts are written off.  Sometimes, if a company deems they are wasting their resources trying to collect on a 'deadbeat' account, the receivables are sent to the collectors, an outside agency who specializes in the collection of hard to collect accounts.  These companies take a commission off of whatever they are able to collect, usually around 50 percent.  If they are unsuccessful, they get paid nothing.No company will come after you after years and years of trying to collect.  They will give it one humongously good effort and if they are unsuccessful in their attempts, they'll give up.This is usually the practice for privately-held or publicly traded companies.  I cannot comment on federal or state related debts.