Originally posted by: jpeyton
From someone who has dealt with this kind of thing before:
1)You haven't lost any money yet. Your PayPal account is in the red, which means DON'T EVER USE IT AGAIN.
2)PayPal cannot charge your credit card or bank account for the balance, so don't worry if you had those items attached to your PayPal account.
3)What PayPal CAN do is e-mail you to pay up. After a while, they MIGHT send the amount to collections, but that is spotty at best.
4)If the item is sent to collections (probably NCO, whom eBay and PayPal use), then your credit may or may not be affected.
5)My PayPal account had a similar negative balance to yours. The amount was never sent to collections, and I didn't hear about it by e-mail after 6 months.
6)Create new PayPal accounts at your own risk. eBay and PayPal are pretty damn good at detecting multiple accounts from the same user, so don't be surprised if any new PayPal accounts you create are "limited" (meaning your money is frozen for 6 months) soon after they carry a balance.
7)It was indeed entirely your fault for not shipping to a confirmed address, but you were smart enough to wait until the payment hit your bank account, which saved you from truly losing $750.
8)Your eBay account may or may not be affected by this. There are some unconfirmed cases of eBay accounts being suspended due to negative PayPal balances, but in my case the account was kept active.
For future reference, only accept PayPal from domestic verified users and only ship to their verified address. International payments should ALWAYS be done with BidPay. If you accept payment by mail, make sure it is postal money orders or major national bank certified checks only (no personal or business checks).