A loan or other financial obligation (such as a car payment or credit card bill) becomes delinquent the first day after a missed payment. To resolve delinquency, you must repay the past due amount (which may include late fees) or make alternative payment arrangements with your lender. After an extended period of delinquency, your lender will report the delinquent account to national consumer-reporting agencies. Your lender will alert the three primary national consumer-reporting agencies (Equifax, Experian, and TransUnion) of your delinquent account. Extended, unresolved delinquency will result in default.


If an account remains delinquent for an extended period of time, it will enter a default status. Default is considered a failure to repay a financial obligation according to contractual terms. Defaulting on your loans can lead to your possessions being re-possessed by the lender or institution that your loan is through or the lender can pursue legal recourse for the amount owed to the lender.


Federal student loans can be written off in bankruptcy only in a few very limited circumstances. Most student loan borrowers who file bankruptcy are still responsible for repaying their student loans.