Personal Loan Default

[sdcates]

What is the name of your state (only U.S. law)? North Carolina
I have defaulted on a personal loan. I enrolled in debt relief and they have contacted this creditor. However, this creditor is taking me small claims court to collect the money owed for the loan. Will I have to pay back the loan all at once? What should I do?

[Antigone*]

What is the name of your state (only U.S. law)? North Carolina
I have defaulted on a personal loan. I enrolled in debt relief and they have contacted this creditor. However, this creditor is taking me small claims court to collect the money owed for the loan. Will I have to pay back the loan all at once? What should I do?

First of all you want to make it a priority to attend your hearing. At that time the judge or arbitrator will ask you to meet with the creditor. I suggest that you negotiate a deal with them. If they are willing to negotiate and have judgement issued against you along with the terms of your deal you will be in a good position.

If you default on a deal (if you're able to land one) believe me the judgement creditor will come at you full force. They will most likely garnish your wages and levy your bank accounts.

They don't have to negotiate, but most small claims judges or referees encourage it.

Hope this helps, take care ana

[dcatz]

Will I have to pay back the loan all at once?

Assuming that judgment is entered against you (and you didn’t mention a defense), there will be a “stay” of probably 20-30 days to allow for an appeal. If you don’t successfully appeal, the full judgment will be due and owing immediately. By local rule, your court may permit you to request installment payments but don’t count on it, and the decision will be at the court’s discretion if it happens at all. Plan for full enforcement.

In your state, wage garnishment is not permitted, but the creditor would have other enforcement remedies.

What should I do?

If you’re paying for the debt relief program, lose that and use any money that you get back to pay the creditor directly. Many creditors don’t like working with credit management services and won’t. That seems to have been true in your case. Try to negotiate a payment arrangement on your own. Use the “search” function to find tips on negotiating settlement and payment agreements. They’re here.