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Getting sued for not repaying your debts, and being court ordered to pay them is an outcome that costs even more than the original debt. This is how to be in debt without facing legal problems from your creditors.
Thankfully in our modern society, we don’t have ‘debtor’s prison’ like in Medieval Europe. Some countries have conditions under which debtors can be incarcerated, but this is not the case under Australian law.
So you can relax about this point if you live in Australia, you live under a reasonably civilised legal system. However, that doesn't mean that you are off the hook in regards to paying off your debt. Creditors are able to sue you to claim back their debt, usually by forcing you to declare bankruptcy. If you are in this situation, it is important that you seek advice from a financial counsellor on how to deal with your creditors and if you choose to fight the law suit then a lawyer will be needed as well.
So unless your debt is in some way connected to a crime, you cannot go to jail for debt. Even then it would be the crime you are going to jail for rather than the actual debt. You can go to debt for breaching certain conditions that revolve around debt. This can include violating a court order, avoiding taxes and not appearing for a debtor’s examination. If you fail to pay your taxes or fail to pay a debt such as child support, you could be jailed. The other way is not showing up for a debtor's examination where you haven’t appeared for a hearing into your finances.
Legal conditions mainly apply to the debt collectors (creditors) rather than the debtors. They determine under what conditions they can sue you if they wish. Then it is up to the ruling of the judge to decide if they win the case, based on law, the specific situation and the discretion of the judge.
If you submit a debt agreement or personal insolvency agreement to your creditor but they don't accept it, then they are able to force you into bankruptcy. This is one of the main considerations you need to make before you submit a debt agreement or insolvency agreement. Your proposal has to be worth more to your creditor than if the forced you into bankruptcy. So if the creditor is able to earn more by forcing your into bankruptcy then that is often the path they will choose over your proposals.
Being force into bankruptcy has serious consequences that you need to consider before fighting a legal battle. Especially because you are already in debt, it can be very costly to fight your creditors who will have the best lawyers and lots of money to throw at a case. Usually, if it proved that you owe debt to the creditor and haven’t been paying it, you will be forced into bankruptcy by the courts. It can be very hard to fight your case, especially when bankruptcy is the norm for people who are not in a position to pay off their debt.
If the creditor wins the case and forces you into bankruptcy, they often gain privilege to:
You can also be forced by the court to pay the legal fees of the creditor that sued you. So there are serious risks to be avoided when in debt. Seized property can be a shock, a lifestyle-changer and a major inconvenience. Court orders to repay debt only increase the stress and urgency. And when debts get passed from one collector to another, you find yourself dealing with lots of different companies, none of which truly know or understand your situation.
This is hard to answer because a lot of the time, debt collectors press charges against debtors based solely on their amount owing, time owing and if they have failed to make payments. So obviously, make the payments if you can. If you can but you aren’t making them—that is the precise reason why creditors are able to file charges against creditors. Besides this:
The best way to not be pursued legally for unpaid debts is taking care of them as soon as possible. If you are having trouble paying of your debt it can be a good idea to talk to a financial counsellor like the ones at Get Out Of Debt Today. They can advise you on how to best handle your situation, whether it be an informal agreement and debt negotiation or smarter budgeting. They will be able to help you handle your debt before it becomes a legal matter in the courts. The best way to make sure your creditors don’t sue you is by coming to an agreement with them well before they are considering legal action.
This way you pay off your debt under your terms with no defaults or black marks against your name. Thousands of Australians are forced into bankruptcy every year for falling behind on their debts. But by talking to a debt counsellor, this can be avoided and you can pay off your debts without being constantly harassed by debt collectors and your creditors. Debt is stressful, but if you don’t take care of it when you need to, it will just end up building up and becoming worse over time.
At Get Out of Debt Today, we wish to empower debtors, and to give them a fair chance in repaying their debt. This is why we provide information like this, aimed at helping debtors through difficult financial situations like being sued for debt. If you’re a debtor being sued, you can interpret the main point of this article as this: stay hopeful. You still have many options and have the potential to win the case or make them withdraw.