Taxes

• When it comes to taxes, reasons for nonpayment seldom matter. The Internal Revenue Service suggests using any legal means possible to pay your taxes. If you just don't have the money, the IRS can set up a payment plan if you fall within certain financial parameters. If you don't have the money, immediately notify the IRS to explain why. Take down names, telephone numbers and confirmation numbers for future reference. Keep a copy of all outgoing and incoming correspondence in the matter. Failure to pay taxes in some states, regardless of the reasons, can result in suspension of driving privileges.
  
  

Insurance

• Businesses rely on payment in order to keep operating. Taking out nonpayment insurance offsets the risks of nonpayment. Regardless of the reasons buyers don't pay, the insurance coverage offsets the losses.
  
  

Performance

• In some cases, nonpayment relates to performance, especially when it comes to government agencies and contractors. A government agency retaining the services of a contractor, for example, expects the labor and material used on a project to meet certain standards. In the event the labor or materials do not meet those standards, the agency may refuse payment. The agency needs to notify the contractor, explain the situation and address the nonpayment. This gives the contractor the chance to either fix the situation or take less money.
  
  

Consequences

• Regardless of the reasons for nonpayment, consequences generally exist. When a person signs a binding contract, such as a car loan or a mortgage loan, he is obligated to repay the funds on time. If the borrower cannot make a payment, the lender can offer payment options or declare the contract broken and repossess the goods or foreclose on the property. Whenever a situation arises affecting payment, the borrower should immediately contact the lender to explain.
  
  (Reference 4)