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What Happens If You Don’t Pay a debt on time?

Everyone has debt that needs to be paid at some point in their life. What happens if you don’t pay it on time? You’re still accountable for the bill, but many people just don’t want to pay debt collection agencies, as there’s no instant reward for paying the debt off. Before you decide not to go through with paying your debt, ensure you know the penalty of discarding the outstanding balance.

We handle debt collection for small businesses in Brisbane and understand how frustrating it can be for lenders when clients don’t pay debts on time. Read below to find out the problems you could face if you don’t pay off your debts in a timely manner.

There will be a negative impact on your credit

This will probably impact if the collection has been listed on your credit report. Your credit score will go down and may have already dropped if the collection is on a credit card or loan. The late payments and subsequent charges which typically come before a collection account will have dented the credit score at the time the collection takes place.

You will be contacted often by collectors.

A debt collector’s job is to make sure you pay the debt. Collectors often don’t get paid unless you pay off your debt. So, expect numerous phone calls and letters until you have made the payment luckily, you have some rights so you can stop the calls by contacting and asking them to stop calling. Be careful though as few of the debt collectors ignore this and go against the law.

 Your applications may be denied.

Unpaid debts are a serious crime and indicate to potential lenders and creditors that you haven’t kept your payment promises. When you considered as a risky borrower and then your applications for new credit may be refused.

 You may pay higher interest rates if you are approved.

Not all applications are refused due to a pending collection on your credit report ( click here ). If you’re accepted, it may be necessary to pay a higher interest rate to make up for the amplified risk of non-payment. Other services, like cell phone or cable services, may require you to pay a security deposit upfront. One positive thing about this is that deposits are credited or returned to your account as long as you pay them on time regularly.

You could have a hard time getting a job.

Not paying your debt on time can adversely impact you in many areas of your life. One such example is you could have a hard time getting into a job. Some organisations check