Dec 04, 2017

When applying for a line of credit, creditors may appear to be the most honest people that you have ever come across, ready to take a leap of faith in your ability to pay off your debt. In reality, they may just be taking you for a ride and you only realize this when they call you collecting a debt.

Keeping You in Dark Over Time Barred Debts

Debt collectors want their money to be repaid in full along with any interest that you owe. To achieve this task, they may threaten to sue you over the debt that you have not paid for a long time. If they won’t threaten to sue you, they would tell you the impact of being a defaulter on your credit report, sending tingles down your spine. Often times, these warnings are nothing but a ploy to get money out of you. In the US every state has its statute of limitations that make you free of any potential lawsuits if a debt is not paid over a certain period. This could be 7 years or 10 years, but the point is that if you are a defaulter for that long your creditor can’t sue you. Moreover, such time barred debts also get removed from your credit files.

Debt Collectors Have to Work Within Limitations

When you are a defaulter, your debt collector may contact you for the repayment. In worst situations, these contacts can turn into harassment and constant annoyance. Obviously, they are going to justify these potential contacts by telling you they have every right to reclaim what’s theirs but in reality they have limitations. They can’t threaten or disturb your privacy under Fair Debt Collection Practices Act and if they are doing so, you have every right to consult the matter to a legal authority. 

You Have to Know Who You Are Dealing With

Sometimes debt collectors sell off the debts to a debt buyer, mostly in situations where they think they won’t be able to collect their debts or may end up facing a substantial loss in case of a repayment. This means that even when debtors are paying their debts, it’s of no use because they are not dealing with the actual owner of the debt.

A Lower Settlement May Just Be a Trick

When repaying a debt, debtors often negotiate to lower the full amount to come to a settlement. Although the lower payment may settle the debt, in some cases it is shown as partial payment on your credit report, while other creditors just sell off the remaining debt to another collector. Debt collectors just want the money that you owe them. And for this they are ready to trick you as long as they get their money back.

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