This time of year can put added stress on your finances, especially if you were already experiencing money trouble before the holidays rolled around. For some struggling Americans, the extra demands of the season can mean complete financial ruin. It’s a horrible time of year to be digging yourself out of a debt pit, but as the saying goes, “There’s no time like the present.”
If you’ve reached critical financial lows, you may have had a repossession company pay you a visit. Anything that you purchased with credit and have since defaulted on (stopped making payments for) can be repossessed. For example, let’s say two years ago things weren’t looking so bad for you in the money arena so you decided to buy new living room furniture.
What nudged you into taking the leap for a new furniture set might have been the incredible (no down payment, no payments for a year) payment plan that was offered up by the salesperson. Some of your self-talk may have sounded something like:
It is frightfully easy to take home expensive items with generous lease-to-own or no money down payment plans. The trouble naturally will catch up to you, when the payments come due. If you’re not prepared and fail to make your payments on time (or at all) – what can happen?
Failure to hold up your end of the payment agreement for items like furniture, vehicles and other big purchases often leads to the company repossessing the item(s) for which you have not as of yet made any payments. Repossession is exactly what it sounds like: the company to whom you are indebted will hire a repossession firm to come to your home where they will take back the furniture that you haven’t paid for.
Purchasing new furniture can be exciting, but that excitement fades once the bill arrives. While it may be tempting to ignore or delay paying your furniture bill, doing so can lead to serious financial and legal consequences. This article will explore what can happen if you don’t pay your furniture bill and provide tips to avoid problems.
Overdue Payments and Late Fees
One of the first things that will occur if you fail to pay your furniture bill is overdue payments and late fees. Most furniture stores have a grace period of 10-30 days after the due date before applying late fees, which are typically $25-50 per late payment. The fees accumulate each month you are late.
Repeatedly missing payments ruins your payment history and credit score. The furniture company will report your late or missed payments to credit bureaus, damaging your creditworthiness. This makes it harder to qualify for financing or loans in the future.
Collection Calls and Notices
If you are 60-90 days past due, the furniture company will likely send the unpaid account balance to collections. Collections agencies will begin calling frequently to demand payment, which must legally be made to them once the account is in collections
Collection calls are inconvenient and can border on harassment with their persistence You will also receive mailed notices from the collection agency, which become progressively stern in tone regarding payment Having an account in collections severely damages your credit score.
Legal Action and Lawsuits
After 3-6 months of no payment, the furniture company has the legal right to take you to court for the unpaid balance. If brought to court, you will be served with a formal summons and lawsuit paperwork. Ignoring the court summons results in an automatic ruling against you.
Appearing in court to fight the lawsuit requires hiring a lawyer and proving with evidence that you do not owe the balance. If the company wins the suit, the court will issue a judgment against you for the amount owed, plus any interest and legal fees. A judgment gives the company broad collection power, including wage garnishment.
Repossession of Furniture
For financed furniture purchases where no substantial payment has been made, the creditor can legally repossess the furniture. After obtaining a court judgment, the company can send repossession agents to retrieve the furniture from your home. Any collateral used to finance the furniture purchase is subject to repossession.
Having your new furniture forcibly removed is disruptive and embarrassing. The repossessed items will be sold by the company, with proceeds paying down your remaining balance. You are still liable for any amount left unpaid after repossession.
Tips for Avoiding Problems with Furniture Bills
To avoid the headaches and hassles above, make sure to take the following steps:
- Carefully inspect financing terms and know when payments are due.
- Setup automatic payments from a bank account to avoid forgetting.
- Contact the company immediately if unable to make payments.
- Explain your situation and try negotiating alternative payment arrangements.
- If all else fails, consider selling the furniture yourself to pay off the balance.
- Consult a credit counselor or attorney for guidance navigating furniture debt issues.
While it may seem harmless to not pay a furniture bill, doing so can spiral into significant financial and legal issues. Act responsibly by making payments on time or proactively communicating with the company to find alternative solutions.
What Should I Do If I’m Struggling with Payments?
If you find yourself unable to make your agreed-upon monthly furniture payments, take the following recommended steps:
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Call the furniture company as soon as possible to explain the situation. Do not wait until you’ve missed a payment.
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Ask about alternative payment plans or temporary deferments. Most companies will work with you if they know you are proactively communicating versus dodging their calls.
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Consider loan consolidation or balance transfer options to reduce monthly amounts.
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Prioritize furniture bills above other non-essential purchases to pay down balances faster.
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Meet with a credit counselor to create a budget and develop a payment strategy.
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Communicate regularly with the company on payment timelines to show your good faith efforts.
The worst thing you can do is ignore calls and letters from the company, damaging your creditworthiness and prompting legal action. Instead, be upfront about struggles and work constructively towards payment resolution.
Falling behind on furniture bills can happen, but avoiding or delaying payment only makes the situation worse. Be proactive and responsible with your financial obligations to prevent significant damage to your credit, finances and legal standing.
What happens after repossession?
The business that sold you the furniture will attempt to re-sell the (now used) pieces to recover at least some of the money they lost. You have no further rights to the furniture once it has been repossessed.
Will I still be liable for the payments?
After your furniture has been repossessed and sold, it is very likely that you will be charged for the difference between the used furniture’s sale amount and how much it was originally worth. This is called a deficiency. At that point you will be responsible for making payments on assets that someone else owns. This is not a desirable situation for anyone.
What happens when you don’t pay that Aaron’s furniture bill #comedy #shorts
FAQ
What happens if you don’t make payments on furniture?
Understanding Secured Debt and Bankruptcy: This creates a secured debt, which means that the furniture is used as collateral for the loan and the lender has a right to use the furniture as security. If you fail to make payments, the creditor has the legal right to repossess the furniture.
What happens if you do not pay your monthly bill?
Consequences of Not Making Bill Payments The following are some of the consequences you may face, ranked from least to most serious: Phone, internet, or utility service disconnects or disruptions. Credit score damage.
Does furniture go on your credit?
This is because financing furniture is considered a form of debt. If you miss payments or default on your loan, it will damage your credit score. But financing furniture shouldn’t have a big effect on your credit score as long as you pay on time and in full every month.
What happens if you never pay your bills?
Bills will probably be turned over to an independent collection agency. You won’t be able to talk to the person or business you owe money to after that point. Collection agencies can be aggressive, but you do have certain rights. Collection agencies can’t use abusive language or threaten you with violence.
What happens if I don’t pay my bill?
If you don’t pay your bill, the company will turn the information over to a collection agency. Once this happens, the collection agency will start by calling you.
What happens if you don’t pay rental fees?
If you use and keep them without paying for them, you are stealing them from the company that owns them (the rental company). In these cases, you can be charged with theft. Once you haven’t paid your rental fees for a week, many companies will threaten to charge you with felony theft if you don’t return the item.
What happens when a bill is paid late?
When a bill is paid late, you’re often charged a fine. If this happens more than once with the same company, the credit bureau may report the late payment. If you’ve ever paid a bill late, you’ve probably noticed that you’re charged a fine.
What happens if a collection agency doesn’t pay up?
A collection agency can take the case to court if you don’t pay after they’ve called you. But the agency can’t send you to jail right away unless they have a strong case that you were dishonest in some way.
What happens if debt is not paid in due time?
This debt must be paid on time, or the facility may have to sell the items in order to get the money back. This does not happen right away, don’t worry. There is an entire process that needs to take place before they sell your items. Does all this make sense? Yes, in fact it does!.
Will I be charged with theft if I don’t pay my TV Bill?
It is pretty easy to figure out that you will be charged with theft if you don’t pay the TV rental bill. However, it can be harder to tell if you will be charged with felony theft.
