When a member don't pay their loan. The company will call your attention and ask you if you still want to pay your loan. Unless you said no the company will forfeit your account transferring the account to Global Money Foundation. All benefits will be cut off and possible commission from your member will be directly goes to the foundation.
Your sponsor or upline are not liable since there is no guarantor required upon availing the loan. Existing member will not be affected even the said member account was forfeited.