What Happens if I Don’t Pay Debt?

Artwork: Robin Mead

What happen if you don’t pay debt? Sometimes: bad things. Sometimes: nothing. It depends what kind of money you have. And how old the debt is.

Hint: If you are on disability, you are really going to want to know if you are on SSI or SSDI before you read the rest of this page.

Student Loans


  • SSDI: They may reduce your disability checks.
  • SSI: Nothing happens to your disability check.
  • Other money: Please check IRS regulations
  • Also check out: Info on tax breaks for disabilities

Child Support

  • SSDI: They may reduce your disability checks.
  • SSI: Nothing happens to your disability check.
  • Other money: Please check child support regulations in your state

Other Government Agencies

  • SSDI: They may reduce your disability checks.
  • SSI: Nothing happens to your disability check.
  • Other money: Please check agency regulations

Social Security Overpayments

Old Debt

  • If you have not paid in a least a few years, you may not even owe this money any more. Debt expires.
  • You do not have to pay expired debt, and if you do pay, you can make your debt worse! If you pay even $1 you can make all your old debt come back!
  • After your debt is expired, collection agents will still call you and try to convince you that you owe money you don’t actually owe. Learn more about How to Deal with Zombie Debt Collectors

Medical Debt

Credit Cards, Private Mortgages, and Other Private Debt

Private Debt – If you own a house or have assets or other income

Private debt is debt from credit cards, medical bills, private mortgages or other debt. Private debt collectors cannot take your Social Security money, Food Stamps, or other benefits. But they can try to do other things. They can try to take you to court, put a lien on your house, freeze your bank account, or garnish your income. They can also hurt your credit rating.

If you are low income, you may be protected. You will need to research the laws in your state. As an example, in Florida protection laws, if your income is low and you do not have much money in the bank, you are protected.

In some cases, your debt may already be expired, or creditors may be trying to trick you. Check out How to Deal with Debt Collectors

If a creditor says they are going to take your car or house: An auto loan may repossess your car. A mortgage may foreclose on your house. If you have signed any loans that used your car or house as collateral, those loans may repossess.

Other types of debt collectors (such as credit cards and medical bills) may threaten to take your house or car, but all of the articles I have read from lawyers agree it is very rare that they will do this. Most likely, they may go to court and put a lien on your property. After a lien is placed, if you ever sell the house or car, the creditor will get part of the money from the sale. Learn more.

Private Debt – If Social Security is Your Only Money or If You Have No Income or Assets

Have you ever heard the Janis Joplin song “Freedom’s just another word for nothing left to lose.” She was talking about you.

If you do not own a house or have other income or assets, there is very little debt collectors can do to you. They can screw up your credit rate. That is it!

Many people with disabilities already have screwed up credit ratings, so there is literally nothing left to lose.

If you want your Social Security check to be protected from debt collectors, there are a few things you need to know:  How to protect your Social Security check.

Here’s a sample letter from Connecticut Law Help you may find helpful:

[Your address]
[Today’s date]

[Name of creditor or collection agency]
[Address of creditor or collection agency]

Re: Exempt Income – Account Number: [Account number]

To Whom it May Concern:

This letter is to notify you that I do not wish you to call, write, or visit me at home or work about the money you claim I owe. This letter is also to advise you that all of my income is exempt from collection as established by law.


[Your signature, date, and printed name]

Include your account number and make a copy of the letter for your records.

If I Don’t Pay, Will I Owe Money Forever?

If I Do Pay Will I Owe Money Forever?

Don’t Just Take My Word For It

Financial regulations are complex and can change. Please double check and do more reading before making any important decisions.

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