The debt should be removed from the report after the seven to ten years. However it is not unusual for the consumer to have to contact the credit bureaus and demand their report be corrected. A debt does not become invalid simply because it is expunged from a, but each state has a statute of limitations that WILL end the debt if you do not pay anything on it for a certain number of years. Check with your state to find out about its statute of limitations.
The debt shouldn't be reported again after the time has expired. The exceptions would be if the creditor won a judgment (which would have its own time limit starting from the judgment date) or if it is an income tax debt.
While the above is true, you will still probably have to deal with what we call "bottom feeders". These are collection agencies which buy old collection accounts for pennies and set about collecting by any means they can find.
This, unfortunately, also includes illegal means. Although these bottom feeders are still governed by the Fair Debt Collection Practices Act (see the Federal Trade Commission's Website for your free copy) they hope the consumer will not be aware of their rights. They will threaten lawsuits, revocation of drivers licenses, arrest, and (this is extreme but did happen) rape. All, of course, illegal in every state of the union.
One more thing: NEVER PAY ON THE DEBT IF YOU DON'T OWE IT! The moment you pay even a penny on a collection your statute of limitations is RESET and you may have to go through the whole thing again.
Most likely yes. States have statute of limitations that determine the time a creditor/collector has to initiate a civil suit against the debtor. It is unlikely that two years would qualify as such in any state. However, the interested person can find out the SOL for debt for his or her state by doing a search of that state's consumer-creditor laws. In regards to usual methods of debt collection (mail, phone calls...) there is no time limit as such. The lender/collector can continue collection efforts as long as they abide by the FDCPA. The debtor has the option of rendering a "cease and desist" letter to stop collection methods, to the collector (not the original creditor) if they so choose.
Creditors are usually one of two options, an internal collection department or third-party collection agencies. Third-party collection agencies are the most common, offering to gather debts for a variety of lenders. Often third-party collection agencies receive commission, usually a percentage of the debt collected. According to the Fair Debt Collection Practices Act (FDCPA), you can put an end to contact from collection agencies or collectors by using the following steps. ▪ Step 1: Decide what you are capable or willing to do about a debt. Ultimately paying off the debts that you owe is the morally responsible thing. Be honest and realistic about your financial situation; can you afford to pay this debt. ▪ Step 2: Put an end to contact with the debt collector. Notify the debt collector in writing that you decline to pay and state that you do not want the collector to contact you further, preferably mentioning the FDCPA. ▪ Step 3: Be aware of the consequences of your actions. Although the debt collector is obligated to stop communicate with respect to such debt there are other options for the collector. The collector can contact the debtor further efforts will be ended. The collection agency or collector may notify the debtor solutions to the debt payment or that the collector intends to exercise this solution. Chances of this account being reported to the credit bureau are good under these circumstances and if the debt in question is a large sum, there is also the possibility of a law suit from the original creditor. If you find yourself stuck in a communication war with a creditor, decide what you are capable of doing, write a letter of intent to the collector and be aware of the consequences of your actions. Ultimately informing the original creditor of your intentions will avoid your account being forwarded to a collector or collection agency in the first place.
Once the account reaches the stage of being fully provided, the collections activity is designated as Recoveries. This is a Hard core delinquency stage wherein the collection efforts are of a more intense nature as compared to the earlier stages. The Hard Core Collector will try to trace the customer and ensure full settlement of outstanding. If the customer is unable to settle the outstanding, the collector will ensure that a settlement plan or discount strategy (as per the agreed guidelines) is offered to the customers. In case the customer does not agree to pay inspite of all these collections efforts then a legal case needs to be been filed against the customer . The collectors officer may also choose to assign the case to the collection agency for follow up. Once the account reaches the stage of being fully provided, the collections activity is designated as Recoveries. This is a Hard core delinquency stage wherein the collection efforts are of a more intense nature as compared to the earlier stages. The Hard Core Collector will try to trace the customer and ensure full settlement of outstanding. If the customer is unable to settle the outstanding, the collector will ensure that a settlement plan or discount strategy (as per the agreed guidelines) is offered to the customers. In case the customer does not agree to pay inspite of all these collections efforts then a legal case needs to be been filed against the customer . The collectors officer may also choose to assign the case to the collection agency for follow up.
The Fair Debt Collection Practices Act (FDCPA) sets rules for bill collectors working for a collection agency (not a collector working for the creditor, many states have laws for all collectors). One of the rules is that they can not call you at work, harassing you, use inappropriate language, lying, adding unauthorized charges and many other practices. Under the FDCPA, you have the right to demand that the collection agency stop contacting you, except to tell you that collection efforts have ended or that the creditor or collection agency will sue you. You must put it in writing. Some thing happened to me. Certified letter telling them to stop worked like a charm.
They can try. That is what they do. Collection agencies do have to work under legal guidelines that are supposed to prevent them from harassing you. Check on the net to find out what they can and can not do in their efforts to collect. If they are violating any of these "rules", you can report them and get them to stop. Odds are you will just continue to get letters telling you to pay up. The bottom line however, is that made an agreement to pay for something. Why didn't you?
Yes, because by doing that you are converting a Negative on your credit history to a Positive action. Those who look at a credit report are looking to see if you are making efforts to "turn things around." Paying a collection does NOT improve your credit and may, under certain circumstances, cause even more deductions to your credit score. This is one of the fallacies about credit. The factor that causes the largest amount of deductions to scores is when a derogatory account was last reported to the bureaus, not the amount owed or the status (paid or unpaid). A paid collection account can be just as damaging as an unpaid collection. The first answer was incorrect. The only thing that will improve your credit rating is to have the collection removed from your credit report. Offer to pay the collection in exchange for a deletion.
A Collection Agency that "owns your debt" can not garnish any wages. Assume that the collection agency in their efforts to collect the debt for their client, sues the debtor and then provoke that the Court works an arrangement to pay the debt, if the arrangement includes garnishment of wages then, the Court can garnish salaries. And there is laws to garnish wages that apply to every state.
Depending on the status of the unpaid assessments, you may need or want to write them off as bad debt.If collection efforts are ongoing to recover the debt, I would not write them off, but as a conservative treasurer, I would discount them and consider something less than 100% of that value is projected revenue.If there are no collection efforts, or if those efforts have failed, you may be able to write them off. Your governing documents will guide you, as will your individual state law.The key is to keep a wide trail and document whatever action the board opts to take in this case.
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