Most of us go into panic mode when we receive notices from bill collectors and collection agencies. I know I do. Although it is upsetting, my sense is that most of us are not aware of the risks associated with our unpaid debt accounts. Creditors have many options at their fingertips to get their money. This article is meant to ease your fear about your creditors and to put you in the driver’s seat as you get out of debt.
Debt Collectors Exploit Your Fear
The biggest tactic used in getting past due money is wage garnishment and seizure of property. This method is based completely on exploiting your fear. The collection agencies usually fail to point out that they need to go to court first to be able to do anything to you. It is possible for a creditor to take you to court and obtain a judgment against you allowing them to garnish your wages and possibly put liens against your home. While this could happen, the chances are small that they would go this far. It is too much time and expense to try and collect from you in this way.
Take It Slowly and Get the Debt Validated My sense is that most of us jump too quickly with the collection agency in paying the debt that they are calling about. I can only imagine how much money has been paid unnecessarily out of reacting to fear. What’s not to believe when it comes to hearing from the collection agent’s threats of impending doom and gloom if payment isn’t made immediately?
Hold on however. If you get a call, take a breath, you have options. The first thing you need to do is debt validation. Make sure that it is a valid claim and that it belongs to you. Given my years of experience in the mortgage and debt settlement businesses, I have seen thousands of mistakes on credit reports and have concluded that the credit reporting system in the US is flawed. Ask for the debt to be confirmed in writing and ask for copies of where you signed the contract or agreement that caused the debt.
Check the Statute Of Limitations For Your Debt
You may also want to check the statute of limitations for your State. There are limits to how long debt against you can be collected. Contact the attorney general in your state for this information. My recommendation is to call them. If the debt has been on your credit report for over 7 years (in most cases), the derogatory and the collection related to it should disappear from your credit report. If the debt has not been paid for 7 years, then it can no longer legally be on your credit report. You can challenge the item and it will come off. If the debt is removed from your credit and the statute of limitation is up on this debt, you should be in the clear. Bankruptcies can remain on your credit report for no more than 10 years.
