DO NOT MAKE THIS PAYMENT!!!!

If you have already, it may be too late. There is a statute of limitations for all states. What state are you in?

The FDCPA makes it ILLEGAL for any collector to attempt to collect a debt outside of the statute of limitations. The debt is still valid and is still owed, however, if they have not taken legal action by means of obtaining a judgment against YOU, they have no recourse to collect.

Also, depending on the state you are in, even if they have obtained judgment, if you were not served papers by a processor, or a certified letter stating that you must show up in court, the judgment can be revoked. Being revoked the account would again most likely fall past the SOL and therefore be noncollectable.

I am in michigan. I got it from the Michigan Attorney General’s Consumer Protection Division that the statue of limitations is 6 years after the last payment. Debt collectors can’t do anything unless they sue you themselves. Any complaints about those who go beyond that six year limit should be complained about to the Federal Trade Commision. In michigan this can be done by two sources:

www.ftc.gov
www.michigan.gov/ag

Click on “File complaint” at either site. The second one is just for those who live in the state and go to the state attorney general. And as always check with a professional to determine for sure if you are past the limitation date. Good luck.

After 10 yrs have been approached by a collection agency

Good Evening, I recently, after 10 yrs have been approached by a collection agency seeking payment for a credit card bill that belonged to 1st wife over 8 yrs ago. At the time of divorce she was able to maintain and pay all of her bills that we divided and agreed at time the time of the{in writing} divorce settlement. Well, 2 yrs later she decided to file for bankruptcy. For some reason or another when she noted all of her bills, the card; that I was the primary on did not make the list for the bankruptcy.

Fast forward to last week. According to the collection’s agent “the $12,000 has grown over the last 5 yrs to a whopping $32,000.” The gentleman asked if, I would like to use cash or charge to take care of this matter.

So after the shock/anger subsided I told him my story and supplied him with the divorce decree stating which bills/acts, were in my name. He then came up with an offer that I agreed to get my name off of this claim. For all of these yrs I had no Idea were following me, due to the fact, that they could not find the ex.

My question is >>>>>> Does anyone know if this agreement that they {Collection Agent} agreed to of the lesser amount really going to get the charge off of my name? Or are they going to then after getting some payment, say by the way now we need the rest…” I have no worries paying the settled amount, but it really does not help me by paying 32k to get a better credit rating knowing that I will not survive or even have a home now; trying to fix a problem from the past that from a malicious ex. Anyone with any comment please feel free to respond.

It may be too late, since you made a verbal agreement, but I would still check with an attorney or your State’s consumer affairs. You may not need to pay this because of the age. There is a statute of limitations where an entity can come after you for a debt. Most states is 7 years. Also, if over 7 years, I do not think they can touch your credit.

If you go through with it, have them send you a written agreement, before you do or say anything else, stating if $x amount is paid no later than a certain date, this debt will be considered paid in full and no further charges can be levied.

If they will not put it in writing, it does not mean anything. If they do put it in writing and you have had an attorney take a look at it (well worth the $250 – $300 they will charge), sign it and return where they must sign for it before giving them a dime.

Court date is next week

They’ve already sued me, court date is next week. I will not attend since I can’t afford to lose the pay for days off work. Besides, I owe the money so I really have no defense. I spoke with an attorney tonight and we laid out a strategy for the next few months, basically just tell them what I can do and what will happen if they force my hand and stick to the strategy. I’ll keep the group posted on any success or lack thereof.

According to the attorney I am working with, the chances are good that CB will sue you. He said they are one of the more vicious creditors out there. They are especially apt to sue if you are trying to deal with them via a Settlement company as opposed to a debt management company. In their view, by using a settlement company, you are trying to cheat them out of part, or all, of the funds you owe them (not my opinion, just info relayed to me by my attorney) In fact, now that CB’s attorney knows I am no longer involved with a settlement company, I am having a much easier time in dealing with them. We actually have a possible deal pending, I’ll keep you posted on the results.

Prosper.com was described as the “eBay of loans.” Simply put, it’s just regular folks like you and me who have a couple of bucks to lend and they lend it to you. You put in a bid for how much you want to borrow and what interest rate you are willing to pay.

Actually, it’s a listing with your particular situation. Then lots of people put in their “bids” – some as low as $50 and when the total amount you are seeking is “funded” you get the loan. Payments can be taken out of your checking account which means 0.25% less interest.

From my experience, when you create your listing, be up front but if you are like I and only get paid 9 months a year (as a teacher), DO NOT tell them that.

Take your entire salary or income and divide it by 12. The lenders want to be sure you have a source of income. Also, though, some of your credit history (delinquencies, etc) are provided to the lenders.

That sounds interesting…. Kind of like “Lending Tree” where apparently, you put in your wish or whatever about a loan, and four banks make offers to you from the post.

Well, I didn’t get the loan from Citifinancial

Well, I didn’t get the loan from Citifinancial that I was trying to go for. Someone told me to check out Prosper.com, has anyone tried it? I really want to get our finances back in order, before it drives me crazy, I’m too young to go insane.

Yes you are way to young to go insane..so stop for a moment and take a deep breath…Now the good thing is you are still young and you are fixing it now…not 15 years from now. I think the no new loan is actually a good thing, because now you have to make some changes in how you spend and save money without a “well I can always get a new loan” attitude….I’ve been there and done that for more years then I care to admit….Read back through the archives here, go to the library and get a Dave Ramsey or some other finacial guru’s book. Then sit down and write it all down, just like the books recommends.

I’ve been in your shoes and been consumed by trying to fix it, it will eat you up. Remember there is no debtors prison, you can’t be arrested, you have unsecred debt, besides the car, and the info/advice you will get here is beyond helpful at times it will be a life line.

I’ve used it. It took a couple of tries to finally get a loan and I’m embarassed to tell you how high the interest is but as with you, I needed it for a stop gap and I will pay it off sooner so I won’t have to pay an exorbitant amount of interest. The higher the credit risk the higher the interest. The cap is based on your state’s law.

How to reduce spending

In the past six years since my husband had his first back surgery (the first of four), I’ve found many ways to reduce spending so I can pay bills. One thing my husband and I both did every morning was buy coffee. He bought coffee at the local gas station, at $1.00 a cup, and I went to a coffee shop, usually spending around $3.00. That was $20.00 per week, which ended up being $80.00 per month. The dumb thing is, we had a coffee maker; we could make our own coffee in the morning. So, we invested two Thermos. We buy two cans of coffee a month, which is about $15. The creamer costs about $12, and the sugar, about $3. Ok, now we spend $30 per month as opposed to spending $80 per month. Right now we’re saving $50 a month to put towards bills, which helps keep us out of debt. OK, the coffee’s not Starbucks, but hey, it’s coffee 🙂

That’s a really good savings! I always knew Starbucks, etc. was an expensive treat to do regularly – but it hadn’t occurred to me that just coffee at the convenience stores would add up so much, too. Way to go!

I can relate to reducing the coffee cost. I always had a spending routine of stopping at the “convenience” store in the morning. After buying the super large coffee, a bottle of cola for later, a morning snack and whatever else hit my impulsive button… I usually spent about $5-7.00 – A DAY.

When I had to cut back because of my debt, I started making coffee at home for the ride to work and also bringing a refillable water bottle to work with me. Not only did I save money, in order to pay my debts, but I saved my health and my time. Instead of drinking the equivalent of like 4 cups of coffee at once in the morning, I cut it down to less than two, then gradually to one. Drinking water all day is definitely a heck of a lot healthier than one sugary cola. I changed my morning snack to an orange, banana or apple. I made it to work earlier also, because I never got held up in line at the convenience store anymore.

Even though I’m not in debt anymore, my husband and I still refuse to pay for coffee at a convenience store in the morning. I actually like the way I can make it at home and I can even flavor it for a lot cheaper, so Starbucks… watch out!

I stopped drinking coffee about 4 months ago, though, because I’m pregnant (due in late January!). With my husband only drinking it now, I make him about two cups in the AM.

Getting out of debt and reducing costs, is not really depriving yourself of “things” you like, its’ changing the habits and the ways you do things. To me it actually became a fun adventure to learn new and effective ways to save money and still be happy. The ironic thing was I became happier than I ever was before.

I am in a similar boat

I am in a similar boat. I too got one of the $200.00 credit cards and pay off the amount ech month. I would love too know ways too improve my credit score too. What I have been doing is reading up on everything on the internet on how to do just that. Yes paying on time, double paying and getting credit reports fixed. I learned they have too take anything over 7 years off.

I learned anytime you write Credit agency, send it certified and get a return receipt, keep it in a book, make copies. It takes 3 or 4 months too get something off. Well for me that is how it worked. Try to settle with all debts/creditors. It is a game of how much they will settle with too.

Good luck too you and just know that one day this will be behind you too!

In reality, it takes time, but every time you make your payments and get the balances down, your rating DOES in fact go up.

By summer of 2012 I had a credit score of 520. I simply looked into a Home Equity Loan and though I decided against it, I found out my FICO score is at 688 this last January!

I didn’t even know it was really changed, as I just kept pounding away at the debts, not thinking of it at all.

But it has seriously improved, and the only way to go is up.

Look at it kind of this way: You don’t need it to be higher, you’re paying off. NOT refinancing and not looking for big ticket things right now. You know the old adage of a “watched pot never boils….” So it is with the score. Pay, pay on time, and pay a little over minimum. You’ll rise again…. Literally.

Any ideas for raising their credit score?

Does anyone have any ideas for raising their credit score? Maybe it’s childish but I’m doing my best to raise my score while paying off debts. My ex always blamed our financial problems on me even though he shared the responsibility. He always wanted to buy things then worry about how to pay the bills and buy groceries. Most of my problem was that I didn’t want to upset things and would give in and do things his way.

In the 20 months I’ve worked on paying my bills on time, something that I’ve never been good at. I still have trouble with that but use the schedule function on my cell phone to remind mea week before the bill is due. The ex’s score is somewhere in the low 300s and since we separated I’ve raised my from that level to around 600. Childish yes, but i love knowing that my score is getting better and his stinks.

One thing my improved score let me do was to get a secured credit card with a $200 limit. I’ve been using the card only for things I’d normally buy like groceries and gas then pay it off in full every month. I know a lot of people say ccs are dangerous. Any tool is dangerous if you don’t pay attention to how you use it. (I also like rubbing it into my ex that I’ve got a card and he doesn’t).

Oh, and the kids are learning that their father (who makes near $10k more than me) is struggling just to survive paycheck to paycheck while I’ve got a slowly growing savings account. I can’t always buy them stuff but I CAN show them how much money I’ve got and when I should be able to afford things. Budgets are great tools no matter how dumb the ex says they are. Who’s getting their finances in shape and who’s on the brink of disaster?

It sounds like you are going in the right direction and making wonderful progress. The scoring really looks hard at the number of cards with balances, your income-to-debt ratio, and of course paying within terms—so sounds like you’re doing what you need to do in order to get it improved, just takes time. You’re doing great!

Jack Cafferty is on Wolf Blitzers show every weekday afternoon. He always has questions for the viewers where they can email their responses and some are read online.
I like Jack. He once read one of my responses on his Sat show “In the Money ”

I was too late to reply to todays first question which was :

Should the IRS turn over accounts to private collection agencies?

One reply was from a guy who said he owned a collection agency and he was all for it. Yeah, I bet. I can see the $$$ in his eyes now! LOL!

How would you reply to Jacks question?

I am not in favor of the IRS hiring collection agencies to collect overdue taxes. There are too many of these collectors that have scammed people, including me. Collection Agencies are at the top of the list of complaints to the government and yet they are thinkingf of putting these people in charge of collections? Unbelievable!

The government needs to investigate these crooks and put some of them in jail and make some real laws at what these co’s can and cannot do.. and then enforce these laws.

To Clarify Myself

I guess I need to apologize – not to anyone in particular – but for getting uncharacteristically heated about predatory lenders.

I wish I could make myself clear about my issue with the problem. First, I’m NOT, in any way, trying to say that people are not responsible for taking on debt, but that seems to be what people read into it when you take a stand against predatory lending practices.

For instance (and I’m NOT comparing this as if they are somehow alike) – a person with a drug habit was at one time responsible for his own decisions and the circumstances brought on by the habit. But, for some reason, he made the wrong decision. A person who has never tried drugs is responsibleness for his decisions in accepting them – but, for one reason or other, makes the wrong decision. Okay – he DOES make the wrong decision. It was HIS decision, as has been stated, because he has “free will”. HOWEVER – do you feel that the drug dealer does not bear any responsibility for his part in a person’s drug habits? No, I realize drugs and debt are not the same – only in the fact that they each have two sides, both bearing responsibility for something that is wrong.

That is how I feel about predatory lending. The person making the decisions to accept credit cards certainly does have free will – no one is forcing him to take credit. But he, like the drug addict, feels he’s in a hopeless situation that only a credit card will fix – and there’s the big lender, ready to give him a fix.

That’s all I’m trying to say. We don’t look at drug dealers and say “Well,they should be allowed to practice their business, because in the end it’s the drug user who has to be responsible”. That is just not true.

Oh, well, I don’t know why I feel the need to justify my feelings I don’t owe that to anyone.

In a perfect world, people would, as someone said, people would refuse credit or pay off their balances – and the credit cards companies would not be allowed to extend credit to people whose credit reports and history proved they did not make enough money to afford the credit, or were a poor risk for any reason. Like I said, I dream that that will happen.

SOL on Taxes?

Does anyone know if there is an exception for taxes, regarding statutes of limitation? I owe $325 to my local school district for an occupational tax. This is from 1999. I live in PA. I had gotten this off of my credit report a few years ago (I actually had no knowledge of the debt then) and just found out that it is back!

It’s so old, it won’t really make much of a difference on my credit report/score. What should I do?

Thanks in advance!

Can you get a student loan if you have a really bad credit?

At this point I am up for any suggestions. My credit is messed up (my fault) but I have a credit worthy co-signer. School starts really soon and I am really hopeless cos so far I think we’ve not been approved because of my credit. Is it possible to have just the co-signer borrow for me without credit check on my part? if yes where can I do this? Thank you!

Sure you can get a cosigner, but they will still check your credit too.. unfortunately!

Next year, as soon as you get your taxes done, make sure that you apply for federal student loans (ie Stafford loan). I’m pretty sure that they don’t take into account your credit score! Shame on New Yorks Governor who could have helped so many struggling families who are victims of the dirty tricks CC co’s play . Typical big business politician ! Money talks… especially when it makes big donations!

Well hopefully the probable next governor the current NY Attorney General will do a better job being consumer proactive.

Credit Counseling Services

I used a credit counseling service six years ago. I managed to pay off my debt in three years; they planned it out at five years. At our first meeting they told us our income exceeded our expenses and they couldn’t help us. They felt that bankruptcy was the only answer. I went out and got a small part-time job and went back to them a month later. They were hesitant; they didn’t think we could do it.

To tell you the truth, I wasn’t sure either. We did. It took planning and time to find ways to reduce our expenses. The credit counseling service charged us $20 per month with no “start-up” fees. They were able to greatly reduce the percentage on the credit cards and worked an agreement with the loans that were outstanding. I will admit that my credit score wasn’t very high while I was using the service, but I didn’t plan to increase my debt anyway. I just wanted to pay off these companies. I would worry about my credit score once I was in a better financial position. It has taken some time, but I am free of credit card debt and while my credit score isn’t perfect yet, it has greatly improved.

One of the first things I did was set up a budget. What was available? Was there anything available? The next thing I did was track our expenses for two weeks. Once we found out where our money was being spent, then we found ways to not spend so much of it. Maybe my story will spark some ideas from others to get out of debt.

Thanks so much for sharing your experience. I’m glad you had a good experience with a counseling agency. And congratulations on your success!

I am a newbie in a financial hole

Hi everyone, I am a newbie in a financial hole looking for a friendly hand to help show me how climb out of this mess. I got laid off 2 yrs ago and have been struggling with my own business since then. Just cut up 6 maxed out credit cards totalling $60K. Now of course my late payments are raising interest rates and late fees, etc.

Should I seek the help of a consumer credit counseling group or will that hurt my credit even more? Should I just figure out how to pay them down myself which seems to be taking forever?

HELP – I am financially frustrated!!

What kind of business do you have? If you are struggling with it, could you have an option to work at your business only part-time and get a full time job with a steady income you can rely on more.

With 60K in credit card debt, you may have to get some outside help through a counseling service (thats a choice that is worth doing some research on before hand) Do you have a mortgage and a car payment each month too? Have you had any problems with collections agencies? All of these things need to be considered so people who have had experience can get back to you. At this point worrying about your credit score, is going to give you nightmares. Yes, there is some importance to it and having a good or great score feels wonderful and can give you added benefits to future credit lines, loans…etc…, but after messing up with debt, having a low score is just a consequence that can be repaired with only your time and effort. In my opinion, there is way too much public hype out there about THE CREDIT SCORE. Like it’s another tool for ultimate happiness. I had a low credit score and it took me nearly 6 years to raise it and now be at a decent level with it. I did it by always making my payments on time, paying much more than the minimums and paying off each credit card a little at a time (I had eight).

But now I have no debt and only two open credit lines on my credit report,(one major credit card and one store card) that I rarely ever use. I avoid using credit like the plague. I don’t even have a car payment anymore and drive a nearly ten year old Saturn, that’s only had a couple minor repair issues, that my husband was able to replace and repair for just the cost of partsand his time. He drives an older SUV, that we bought with cash. We like the freedom of only having one outstanding debt and that is our mortgage. of course at the time that we applied to finance our house, we could not do it with my name on it, because of my credit history. Now, with our next house, I will be able to be a legitimate owner on paper.

It’s not unheard of that people in a debt situation like yours have been able to work out of it all on their own. It’s matter of what you are willing to give up and live very frugally for a certain amount of time. There is a way to still be happy living very simplistically, meaning only buying what you absolutely need to survive and giving up the rest. I’m an expert at this and I did that for five years to pay off credit card debts. After that, I found out that my live was not any more complete when I finally had the ability to afford what I considered “luxuries”. They all seem frivolous. Now I save money like you would not believe and have a very good balance of when to spend and when not to. It was lesson worth every minute through my debt payment time.

Stick around here at DebtSteps, fill us in on some details, so others know how to help you with advice. Another word of caution, try to stay away from reading and dwelling into EVERYTHING about debt, because you don’t want to drive yourself crazy with way too many opinions.