What happens if I don't pay a margin call?

Asked 4 years ago

If I use a margin account, don't pay a margin call or debt, and get liquidated, does that mean I lose my account? What happens to the current positions I am holding? Does the severity of it differ from broker to broker?

Margin call Margin debt Liquidation Margin account

Andia Rispah Igobwa

Thursday, September 09, 2021

If you fail to meet the margin requirements, an account can be liquidated. The stroke usually becomes devastating, as investors will lose all their assets.
If you cannot pay a margin call account, your broker may force your funds to be liquidated for it to meet this requirement. Such action could result in the investor losing everything that they have invested. 
Liquidating accounts is very uncommon unless other red flags are involved with the investor's trading, which needs further review by the firm's employees or account managers. 
Locating other sources of funds besides borrowing from a brokerage should always be a top priority before anything else is done because this course of action does considerably more damages than an individual might think at first glance.