Zombie debt collectors dig up your old mistakes

[rpannier]

I feel this article is important because it tells you your rights and what pitfalls to look out for in dealing with collection agencies and credit card companies.

There's a hot new growth industry: companies that buy bad debts for pennies and squeeze you to pay in flagrant violation of federal law. Here's how to get them off your back.
As a student in Fort Worth, Texas, she maxed out a Citibank credit card with a $300 limit and never paid the bill. Debbie said Citibank charged off the debt sometime between 1987 and 1989, and the liability has long since disappeared from her credit report.

Today, however, collecting on old debts is a rapidly expanding industry. Aggressive companies can buy charged-off credit card accounts from the original lenders for pennies on the dollar. Then, they use credit scoring and other new technologies to identify which debtors are most likely to pay. The players in this bunk debt market range from fly-by-night outfits to well-established companies funded by Wall Street investors.

Paying off can hurt your credit score
What's more, paying an old debt potentially can wreak havoc on a consumers credit score, as I discussed in "When paying bills can hurt your credit." Such a payment can update a delinquency so that it looks more recent and takes a heavier toll on a credit score.

full article can be read at:
http://moneycentral.msn.com/content/Savinganddebt/Managedebt/P74812.asp?Rating=10&PageID=74812#Rating

[newscott]

1. From personal experience

I had several credit cards charged off due to bankruptcy many years ago.

Recently, when I was getting my credit history in shape to buy a house, I noticed that there was a notation of a credit card with Wachovia. I had never had a credit card with them so I called to figure out what was up.

Turns out they bought out one of my old credit card companies and told me that they get all the charged off records too.

This means they effectively were reporting my bad credit card twice.

I was angry, but there was nothing I could do.

The bad card has since disappeared from my credit history. No explanation, no mea culpa, nothing.

[sarcasmo]

2. Each state has a statue of limitation on an old debt.

Old debt collectors who buy your back debt are the SCUM of the Earth.

[Matariki]

3. debt collection statue of limitation by state:

http://www.fair-debt-collection.com/SOL-by-State.html

[Berserker]

6. READ THIS SITE

http://www.budhibbs.com/alternative.htm

This is the best info I have ever seen on debt collectors. Also please read his Free book it's a .pdf file and it's GREAT
The book is on the site also.
http://www.budhibbs.com/download_book.htm

Once you are armed with his advice you will not believe what you can do.

[cwydro]

4. wow, interesting

hey thanks for the info....!

[Wickerman]

5. thank you for posting this

I know someone who will find this very useful. They have been harrassed for a very old debt. When they paid it they were directed to call another number. That agency then started collection on what they called interest and penalties. As someone said above - collectors of old debt are scum of the arth and from what I've heard operate within the slimest margins of the law.

[wakeme2008]

7. I know a man that was a manager at one of this slimeball collection

agency.

How this agency worked:

The attorney that ran the "agency" incorporated his wife in a shell company to buy debt. Wife's company would buy pay $50,000 for a ton of paper. They paid 1 1/2 to 3 percent of the balance on the loan. That $50,000 buy would buy a lot of debt.

The wife would then "hire" her husband's law firm to collect the debt. Under Florida law the law firm could start charging interest on the original balance at like 28%.

And I will let you guess how friendly Florida Courts are to these debt collectors.