If you’ve ever been late paying a credit card bill, you know just how persistent creditors can be. And it seems that persistence scales even when the debtor is a national government. Argentina has been dealt a major blow in its ongoing fight against creditors, as the United States Supreme Court has rejected the country’s appeal against a lower court ruling that prevents them from making bond payments in the U.S. if they refuse to pay a group of hedge funds that would not take restructured debt following the country’s 2001 default.

The news could spell another potential financial crisis for Argentina. The Wall Street Journal reports that since the decision will block payment on bonds, the country will now need to decide whether to reach a deal with debtors or default on its bond payments.



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Argentina’s President Cristina Kirchner has been vocally opposed to paying out debtors, calling them “vultures” and charging that their unwillingness to take restructured debt should not require the nation to pay the original amount.

But despite the pressure imposed by the SCOTUS, Argentina says it will still not pay the hedge funds. In an address on June 16, Kirchner said, “Argentina has shown more than an evident willingness to negotiate [its debts]. But one has to distinguish between a negotiation and extortion.”

Previously debtors have done everything in their power to recoup the money owed to them by Argentina. “Creditors attempted to seize the presidential plane in 2007. Elliott Management Corp.’s NML Capital Ltd. impounded a navy training vessel in 2012 and this year tried to block Argentina from launching a pair of satellites. The holdouts are owed over $1.5 billion, according to a person familiar with the matter,” the WSJ said.

Now that the legal decision has been made, what Argentina chooses to do could not only impact its relationship with the U.S., but also set a precedent for debt collection following a government default and potentially falter a shaky economic recovery.