Some money problems arrive as a question in the middle of the night: what happens if I stop paying, ignore the letter, miss the deadline or cash out early? These guides lay out what actually happens, in order and on what timeline, along with your rights and the first steps that limit the damage. They cover debt and collections, housing, taxes, retirement money, health costs, insurance, estates and identity theft.
Timelines and penalties from federal law and agency guidance; state rules vary where the guides say so.
Most money trouble follows a timeline with exits along the way. A missed payment brings a late fee, then a late mark on your credit report once it is 30 days past due, then collection calls, a charge-off or default, and sometimes a lawsuit, wage garnishment or repossession. The earlier you act, the more options you keep: hardship programs, payment plans and loan modifications are easiest to get before an account is charged off or in default.
You have rights along the way. Debt collectors must follow the Fair Debt Collection Practices Act: they must send a validation notice describing the debt, can't harass you or misrepresent what you owe, and must stop contacting you if you ask in writing, though they can still sue. If you are sued, respond by the deadline; a default judgment can let a creditor garnish wages or levy a bank account. Every state limits how long a creditor can sue, and in some states a payment on an old debt restarts that clock.
Government debts work differently. The IRS charges penalties for filing late and paying late but offers payment plans, and it seizes property only after a long series of notices. Defaulted federal student loans can be collected through wage garnishment and tax-refund seizure without a court order, though the Education Department paused those collections in January 2026; the student loan guide tracks the current status, along with income-driven plans and the way out of default.
Retirement money is expensive to reach early. Withdrawals before 59½ usually cost income tax plus a 10% additional tax, with exceptions such as leaving a job in or after the year you turn 55 (for that employer's plan), disability and some medical costs. A 401(k) loan avoids the tax if you repay it on schedule. When you don't know where to start, a nonprofit credit counselor can review your budget for little or no cost, and the Debt Relief Path Finder ranks every way out of debt by cost and credit impact.
Each path is a short reading order. Start at step 1 and stop when your question is answered.
For bills you can't pay and the calls that follow.
For housing and bank-account trouble.
For the IRS and early withdrawals.
For coverage gaps, estates and fraud.
You are charged late fees, and once a payment is 30 days late the issuer can report it to the credit bureaus. After about 180 days the account is usually charged off and sent or sold to collections, and the creditor or a debt buyer can sue. The late payments and the charge-off can stay on your credit reports for seven years.
Yes, as long as your state's statute of limitations hasn't run out. If you are served, respond by the deadline; ignoring the suit usually leads to a default judgment, which can allow wage garnishment or a bank levy. You can ask the collector to validate the debt, and collectors must follow the Fair Debt Collection Practices Act.
If you owe, the IRS charges 5% of the unpaid tax for each month or part of a month the return is late, up to 25%, plus a separate 0.5% a month for paying late, and interest. If you are owed a refund, there is no penalty for filing late, but you have three years to claim it.
Withdrawals before 59½ are taxed as income and usually cost a 10% additional tax, and plans generally withhold 20% for federal tax. Exceptions include leaving your employer in or after the year you turn 55, disability and some medical costs; a 401(k) loan avoids tax if you repay it on schedule.
Your state's intestacy law decides who inherits property that goes through probate, usually a spouse and children first, and a court appoints someone to settle the estate and, if needed, a guardian for minor children. Accounts with named beneficiaries and jointly owned property pass outside that process.
Report it at IdentityTheft.gov, the Federal Trade Commission's site, which builds a recovery plan, and place free credit freezes with Equifax, Experian and TransUnion. Then contact the companies where the fraud happened, change your passwords and review your credit reports.