Why Do They Settle?
Creditors and collectors frequently settle debts to cut their losses and to make the best of a bad situation. Make no mistake, creditors do not offer these concessions because of their compassion for you or your family. They make deals that they believe will maximize what they collect; it’s strictly a dollar and sense decision.
Debt collection is a business and like most businesses, it’s objective is to make a profit. With this in mind, you can understand the principle that dictates how most debt collectors run their operations. Bill collectors will work the hardest to collect debts that they believe will provide the greatest rewards.
Should You Pay Old Debts?
Under the law, a debt is owed until it’s either paid or wiped out in bankruptcy. Many people wrongly believe that a debt is no longer owed once the account has been charged- off. Wrong! A charge-off simply means the original creditor cleared the debt from its books and will no longer pursue the debt internally. Rest assured, they still want to get paid.
In order to collect, the original creditor sells the debt to a collection agency or law firm, usually for pennies on the dollar. At this point, your credit has already been damaged. The collection agency uses collection tactics based upon the: type of debt, amount owed, where you live, and the type of job you have. These collection methods are often unprofessional and down right nasty.
What is CreditClock software?
CreditClock.com's patented software technology tracks both state and federal time limits in which your creditors may seek legal action against you to collect a debt. Typically, as this time period comes close to expiring, your leverage to negotiate your credit card debt increases.
How long can this stay on my credit report?
The Fair Credit Reporting Act describes how long items can remain in credit reports and when they must be removed. Some items have a 7-year "Statute of Limitations" while other items remain for 10 years or, in the case of tax liens, indefinite. The clock starts from the date of last (DLA) with your original creditor.
Collection companies often update Consumer credit reports with false (more currrent DLA) to extend your credit reprting period. This practice is illegal under Federal law but collectors take the chance to increase their collection leverage.
CreditClock.com tackles this very important time period for just $9.99 per month. We will alert the Consumer, the 3 major bureaus (EFX, EXP, TRU) and the collection agency. Go month to month, there are no contracts.
Statutes of limitations do not apply to all debts. For instance, there is NO statute of limitations on:
•Federal Student Loans •Past Due Child Support (state dependent) •Most Fines •Taxes (Income taxes have a 10-year SoL but this can be suspended as well as have more time added by filing the proper forms.
The Statute of Limitations on debt depends on the type of debt and your State's civil debt collection codes. Generally, unsecured debt expires 3 to 6 years after the last missed payment or the consumer's last activity on the account. Written contracts such as car loans generally expire after 6 years. Judgments can last up to 20 years and can require the judgment be renewed at a certain point such as the 6-year point.
