I understand that the IRS makes sure you play taxes, but what about loans? Like can’t I just get a movie from a redbox and never return it since i’d only have to pay when I returned it?
In: Economics
Best case scenario people will know you never pay back your loans. And the you will get turned down for basically anything you aren’t paying full price in cash with.
Wanted to buy a house? Nope.
Wanted to rent an apartment? Yeah, also no.
Not sure about all types, but you end up with liens on your property (collateral) in many cases. From there eventually the property can be confiscated to sell and pay off the lien/loan.
Certain loans involve collateral where they can seize your property if you don’t pay (auto and home loans tend to be like this as well as some commercial loans).
Even for loans without collateral, you can be taken to court and your assets seized if you don’t pay.
However, the cost of doing so tends to prohibitive, so most of the time lenders will simply report to the credit bureaus your failure to pay. This hurts your credit rating, which can impact your ability to gain future loans, employment and rent housing.
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