Hi I owe 3 creditors over 80000 $ and I've been told that I could possibly go to jail,?

Question

I'm trying to find out if it's true and how long do I have to pay them back and how ? and can I ever establish good credit again? it's been over 4 months that I haven't paid any of them

Answer 1

You are not going to jail for owing creditors. They are just trying to pressure you. Unless of course you have committed fraud in which case you might be going to jail. how you resolve this depends on what you did and what kind of debt it is.

If this is unsecured debt and not suddenly run up and then not paid for then you can declare bankruptcy. Unfortunately they may decide to send you a 1099 form and declare the charge off to be income to you. The tax on this is 15,698.75 plus 28% of the amount over $77,100 but less than $160,850. This becomes problematic because now you owe the government and they don't discharge taxes in bankruptcy. Additionally depending on your income and situation you may end up in chapter 13 rather than chapter 7 and have to pay back some of the debt.

If this is secured debt such as cars, homes, or other real property they will want it back and then charge you the difference between it's worth and what you owe which may be substantial. If the gap isn't huge you run the risk of chapter 13 or the 1099 or a combination of the two.

I would call a credit counseling agency since you have to go that route before declaring bankruptcy. They will determine the best path for you to take and if you are truly absolutely insolvent you can look for a bankruptcy attourney. Simply not paying them is not going to result in anything good and likely the next call you get will be from a collections agency who have all sorts of legal remedies including wage garnishment and the like. So call today and begin the process of fixing your credit which is likely 7-10 years away from being perfect.

Answer 2

There is no debtors prison. the only way you can be jailed is if you defrauded someone. Rebuilding your credit is extremely difficult sometimes. Don't expect quick results and don't be fooled by credit repair scams. Spend the money to pull your credit report, make a list of all your debts and the amounts, contact them all and let them know what your position is and see which ones are willing to help you out. Work with the ones that will help you first. Set small goals and stay positive. I was busted 4 years ago and I am now partner in the fastest growing floor store in my town. I also started an investment company for people who are low income. Check it out at SIREDevelopment.com. Good Luck!

Answer 3

Probably not jail, unless there was fraud involved in running up those debts - if there was, then it would be possible.

They could, though, probably take pretty much whatever you own if they get a judgement against you for the money.

Try to pay all of them at least something every month. Yes, you can repair your credit eventually, but it will take a long time with debt like that.

Answer 4

Not unless you committed fraud and then you would need to be tried and convicted of fraud charges. Actually 80K in default is not that bad. Someone who owns a basketball team was in the news for owing the IRS $160 million. Check with a bankruptcy attorney. You may be able to wipe out the debt Chapter 7 and start to re-establish credit rather quickly.

Answer 5

Quit hiding and find a debt counselor in the yellow pages!!and work with them.They can help if this is strictly credit cards or a car payment. They cannot help you with a mortgage that you will have to file one of those Chapter 7 which says you will pay them but you can't right at the moment you can pay a low fee and won't be a bankrupt, so your credit won't be ruined,that is the good thing.

Answer 6

You need to talk to them asap and see if they are willing to set up a payment plan. From what I understand, threatening to send you to jail is one of the ways bill collectors try to rattle people. I urge you to go to www.daveramsey.com. Listen to his show, via the web and find a "Financial Peace" class. You cannot avoid this and honestly, you need to deal with this since I'm assuming that you were the one who ran the bills up.

Do the Dave Ramsey process (which doesn't involve a lot money or get rich schemes or changing social security numbers) and you will be able to get back on your feet! It works and you can be debt free. It won't be hard BUT you can do this. My husband and I are debt free (except our house) and I've heard people talk about paying off huge amounts of debt, using Dave's methods, and doing it the right way.

Good luck. Hang in there.

Answer 7

You are not going to jail for owing a creditor!

by the way, if they told you this, then they are violating the law and is punishable by a $1,000 fine for each occurrence. Seek credit counseling or consider bankruptcy.

Answer 8

I think most of them say that you could go to jail, but thats to scare you into paying them. The only thing i can suggest is getting with a debt cosl. or even trying to file Chapter 7 Bank. because you will never be able to pay everyone u owe noone will we will all leave here oweing someone, so enjoy life and make one of those choices.

Answer 9

My fiance owes creditors around 60,000 and this all happened about 10 years ago, so no, you cannot go to jail. But you still should work on paying those off or declaring bankruptsy if you ever want to get your feet back on the ground.

Answer 10

Did you do anything illegal? It is not against the law to owe money. Do you own property or anything you could lose in bankruptcy? I went bankrupt a number of years ago but have rebuilt my credit rating and now have a credit score of 820. Ask a good lawyer about bankruptcy.