7 Things To Know About Creditors And Debt

  1. 1. Most people know that negative items on your credit report can be removed after 7-10 years. It is usually within the state’s statute of limitations.

    2. What happens once these items drop off your credit report? Your credit score improves. If you pay your bills on time and in full, you’ll be less likely to have these negative items reappear on your credit report.

    3. If you have defaulted on a loan and later paid it in full the debt will show as paid on your credit report.

    4. If you are still paying off debts from previous years, it is possible that the debt is now in default. If this is the case, you should try to rectify it as soon as possible. It can damage your credit score and make it more difficult for you to borrow money in the future.

    5. The statute of limitations does not stop the collection company from attempting to collect on a debt especially a Government Debt. However, if it is a valid debt, then the collection company will report it as “collectible” and not “noncollectible” .It is still advisable to pay off debt, as it will improve your credit score and report.

    6. If you have not paid a debt for over seven years, it can start again from the beginning. You need to understand that this could have an impact on your credit rating.

    7. The time limit for debt collectors to sue you varies from state to state. If they fail to sue within the time limit, they will lose the opportunity to collect the debt.

Be careful when speaking to your creditors

If you are being contacted by a debt collector, you should first ask if they have legal grounds to be contacting you. If they do, you should ask for proof of the debt. Next, you should ask for proof of the original creditor and the date the debt took place.

See if your state laws allow it.

 

How to get out of debt?

 

  • Consolidate your debt is an easy way to pay off debt and improve your credit scores.
  • Or to try to settle your debts by paying it back over time, rather than paying it off in one go.
  • You should be careful not to overspend your budget.
  • Bankruptcy is not a permanent state. In some instances, a bankruptcy discharge can be revoked if it was fraudulently obtained.

 

The Fair Debt Collection Practices Act Protects You

  • If you can’t afford to pay your debts 
  • Can’t afford to carry on paying them

You are protected from harrassment, threats and any other unlawful acts from your creditors.

If you are not happy with the information that is being reported on your credit report, you are entitled to dispute it. This means you will be given the opportunity to dispute the information and have it removed from your credit report.

You can get a validation letter if you dispute a debt. This will confirm that the debt is not yours and is time-barred.

If you owe a debt and a debt collector attempts to collect it in any unlawful way, you can:

File a complaint with the CFPB and report it to the local authorities

Does a past-due debt affect your credit rating?

Debt that is time-barred meaning old debt that has reached the statute of limitations either 7 or 10 yrs. (or whatever is applicable in your state) and the creditors cannot sue you.

However, they can still try to make you pay. The debt will still be listed on your credit report. You can, however, dispute it with the credit reporting agencies. This will be beneficial if you have a good reason to dispute it such as it was a mistake or fraud.