Tag Archives: debt collectors

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Running Out the Clock on Debt

If you have charge-offs or collection accounts on your credit report, you’ve probably heard that debts can no longer be collected after the statute of limitations expires. That’s true–sort of. The devil is in the details, though. So here are some important distinctions about running out the clock on old debt.

On a personal note, I have done this myself. I had a few charged-off credit cards that went into collections several years ago. Some lenders had sold the debt, and others had kept it and hired collection agencies to try and collect.

At this point, I was well into my credit repair journey, and I knew that if I could make it 4 yeas from the date of first delinquency (without getting sued or doing something to extend the statute of limitations–more on that later), I was home free. At the time though, 4 years (the statute of limitations in my state) sounded like forever.

Running out the clock should never be your Plan A. It’s more like Plan B, C, or D. But you need to be aware of the statute of limitations and some other important info no matter what your plans are. 

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Infographic: Which States Allow You to Record Phone Calls with Debt Collectors

Credit Repair Infographic: Recording Debt Collectors' Phone Calls by State

Click image for full size infographic

One of my Credit Commandments is to never talk to debt collectors. However, people are prone to ignore this commandment, especially if they’ve already crossed that bridge, and so the next Credit Commandment is to record your phone calls with debt collectors for your own protection.

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Banks Want to Robocall You

From Marketwatch:

According to the Telephone Consumer Protection Act, it’s illegal to robocall a mobile phone number without permission. The American Bankers Association wants to change that, arguing that robocalls will help fight identity theft and other kinds of fraud. Opponents say that’s an overreach, one that will erode an important consumer protection.

That’s one explanation. Another is that it allows them to repeatedly call people who owe them money, like this couple. If you’re between 3 days and 6 months late on your credit card payment, the debt hasn’t been charged off yet and the banks still consider it recoverable. This window is when they like to bombard people with debt collection calls. Changing the law to allow robocalls would facilitate this.

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Debt Collectors Target Retired, Elderly

From NBC:

Faced with a fixed income and constantly rising cost of living, many seniors now spend their “golden years” juggling bills and fending off debt collectors.

“If they get a phone call at 10 o’clock at night and the caller is harassing them for a debt, it can be very scary,” said Amy Nofziger with the AARP Foundation. “We know that it causes a lot of stress for seniors because some of these debt collectors can use foul language and other forms of harassment to try to collect the debt.”

Senior citizens are the perfect targets for debt collectors. Younger people screen their calls, and won’t hesitate to hang up salesmen or debt collectors. Seniors have that sense of old-fashioned manners that makes it, well–rude to do that. Sadly, debt collectors take advantage of this. Anything you say to a debt collector can and will be used against you.

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Couple Wins $1 Million from Bank in Suit over Repeated Debt Collection Calls

From ABC News:

Bank of America is being forced to hand over more than $1 million to a Florida couple after the bank flooded them with hundreds of loan collection calls for years – the latest example of alleged behavior that has cost the bank tens of millions.

In a complaint filed in July, attorneys for Nelson and Joyce Coniglio said that the couple had been on the receiving end of “patterns of outrageous, abusive and harassing conduct” by a subsidiary of Bank of America that included 700 calls in four years, after the bank said the couple fell behind on mortgage loan payments in 2009. The Coniglios also received “threatening collection letters asserting false and misleading information,” the complaint said.

The couple sent multiple letters from legal representation asking the bank to stop, but the calls — sometimes up to five a day — continued. The complaint describes automated calls leaving repeated pre-recorded messages.

2009 seems to have been a high-water point in this kind of debt collection. That was when I was going through my own credit card debt mess, and lots of others who were in the struggle at that time were victims of the “let’s just call them a million times and see if they’ll pay!” routine.

And hey, let’s be honest–$1 million is a pretty nice payday. This is why you document everything. Log every call. Record every call (if it is legal to do so). Take notes.

Document everything.

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35% of Americans Face Debt Collectors

From AP:

The study found that 35.1 percent of people with credit records had been reported to collections for debt that averaged $5,178, based on September 2013 records. The study points to a disturbing trend: The share of Americans in collections has remained relatively constant, even as the country as a whole has whittled down the size of its credit card debt since the official end of the Great Recession in the middle of 2009.

This study is a few months old, but I’m posting it to remind you of something very important in credit repair: You are not alone! Over a third of the people you see walking down the street are currently facing debt collectors.

When you’re struggling with debt and being hounded by debt collectors, it’s easy to make up that it is a unique problem you alone are facing; but it’s not. Take a little bit of encouragement from the fact that others are struggling too, and don’t believe everyone who tells you his life is perfect.