The Worst Legal Problems That Debt Can Cause
Debt is a major source of stress for most people. People worry constantly about debts they cannot repay, but really, what is the worst that can happen if you do not pay your debts? You can’t go to debtors’ prison, but you can face some unpleasant consequences. People choose to address their debt because they want to avoid the risk of losing their assets or being excluded from access to credit or from housing and employment opportunities. It may be tempting to ignore your debts if you cannot pay them, but figuring out a strategy that is feasible given your limited means is a much better idea in the long term. These are some of the worst consequences that can happen if you do not do something to free up funds to pay your debts. To find out the most manageable ways you can avoid getting into legal trouble because of your debts, contact a Jupiter debt lawyer.
Business to Consumer Lawsuits
Some states offer robust protection against business to consumer lawsuits, but Florida is not one of them. In Florida, it is legal for creditors to sue consumers over unpaid debts. These lawsuits often involve debtors’ exams, where the creditors’ lawyer interrogates you about your income and expenses to determine how much you can afford to pay, effectively rewriting your budget for you. If the court rules in favor of the creditor and you still cannot pay, the creditor can seek a court order authorizing garnishment of your paychecks.
The most common types of debts that result in business to consumer lawsuits are credit card debt and unpaid medical bills. These are also some of the easiest debts to discharge in bankruptcy. You should consider filing for bankruptcy protection if credit card companies, hospitals, and doctors’ offices are threatening to sue you.
Unpaid Child Support
You cannot discharge child support obligations in bankruptcy. If you don’t pay child support, the court can hold you in contempt, which means you can go to jail. The court can also order garnishment of your paychecks. If you can’t pay your child support, you should petition the court to modify your child support order or file for bankruptcy to discharge your other debts to free up money to pay child support.
Criminal Charges for Tax Evasion
It is very difficult to discharge tax debts in bankruptcy, and while not paying child support is not a crime, not paying taxes is. You can get criminal charges for tax evasion if you make false statements on your income tax returns or if you do not file tax returns at all. It is possible, however, to set up an installment plan with the IRS for paying your overdue taxes.
Work With a Debt Lawyer About Avoiding Debt-Related Legal Problems
A South Florida debt lawyer can help you prepare your case for bankruptcy court so that you can avoid other court cases related to your debts. Contact Nowack & Olson, PLLC in Jupiter, Florida to discuss your case.