What are My Options and What Can Happen to Me for Not Paying the Debt?

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I signed an agreement with another person that stated that I would pay him $3000. We had the agreement notarized. After making a few payments, I lost my job and I can no longer afford to pay him. I am in the process of filing for bankruptcy. What are my options and what can happen to me for not paying the debt?

[NOTE: Articles and answers on DearEsq., while written and published by lawyers, do not constitute legal advice, and no attorney-client relationship is formed by your reading of this information. You should always consult with an attorney for any legal situations.]

You should contact the other party and see if you can renegotiate the agreement. The other party may agree to lower your payments, provide you with a temporary payment forbearance, or continue to enforce the established agreement. If you do not pay the debt, the other party may sue you in small claims court to collect the balance owed.

Alternatively, you can include the debt in your bankruptcy estate, but the other party will be able to challenge the requested debt discharge. Depending on the circumstances of your bankruptcy, the debt may be discharged, or you may be required to pay a reduced amount to the other party over a designated period of time.

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Author: House Attorney