Worried about loan repayments? We are here to advise you.
If you’ve taken out a loan you can’t afford to repay, it’s only right that you should feel some anxiety about where to turn next. What do you do when you don’t have money to pay your lenders? Will you end up going to jail to repay your debt? We investigated whether or not you will go to jail for failing to repay a loan in the article below.
Types of Loan that are Commonly Reneged
There are lots of type of loan out there, but there are common loans which many people fail to repay. Most of these involve either student loan debt or home owner debt. If you choose a traditional homeowner’s or personal loan over something easier to manage (like a HELOC, see https://www.selinaadvance.com/) then you are at risk of failing to meet repayments. It’s nothing to be ashamed of and it could happen to anyone. Even the President could lose his job tomorrow and fail to pay off his house. The important thing is not to bury your head in the sand. We’ll talk about the rules on reneging payments on loans next, then we will point you in the right direction for getting good debt advice.
Can I Go To Jail for Not Repaying Loans?
The short answer is yes, you can, but it’s not for repaying the loan specifically that you go to jail. If you stop making your loan repayments, you won’t go to jail. If your lender then decides to sue you to get their money back, a judge might court order you to repay the payments. If you ignore that judge and keep failing repayments, then you may be arrested and taken to jail. This applies to those living in America only. If you live in the UK, you probably won’t go to jail for failing to repay your loan. If you do it multiple times across different lenders, though, you might go to jail for fraud, instead.
Further Help for Loan Repayments
If you are truly stuck and cannot repay your loan, the best thing you can do is to contact your lender and discuss an altered repayment plan. What you have to remember is that the company you borrowed from really wants that cash back. If they don’t get it, they are out of pocket. This means they will go out of their way to provide you with a solution that suits you both. A repayment of $2 a month is better than no repayment at all, so do contact them for help.
Secondly, you can get help to repay a loan by seeking out advice. We recommend you visit with a financial advisor to try and work out your finances. This has an outset cost but could save you money long term.
Lastly, check the type of debt you are in and the rules regarding repayment. If you live in the US and are struggling to repay your student loan, for example, you can find out more about debt forgiveness to see if it applies to you. If you need help to repay a loan in the UK, on the other hand, the Citizens Advice Bureaux will be able to help.