First realize we can't speak for PayPal. We can only report what has happened in the past. If your PayPal balance is negative PayPal is going to request that you fund your account to balance out. If you do not, they will probably try to put a charge to your credit card on file, and/or debit your banking account on file. They will do this because you agreed to this when you joined PayPal and/or accepted their Terms of Service. If your credit card is no good and/or your bank account has been closed or you have put a block on it to prevent PayPal from accessing funds there, then PayPal will most likely turn the account over to a collection agency and lock your account. You won't be able to use it again, nor will you be able to create a new one. (Also against PayPal's Terms of Service.) If the negative balance is due to fraud or criminal activity, you probably have the right to contest it. Especially if they put it on your credit history. See NCO Collection Agency page.