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Debt Frequently Asked Questions
We know how overwhelming financial issues can be.
What constitutes harassment by a debt collector?
Just a few examples include:
- Using abusive language. This includes threatening you or using profanity either over the phone or in a message that they leave for you.
- Giving you false information. Debt collectors must give you accurate information about how much you owe and who they are.
- Outright lying to you. Some debt collectors have been known to lie and say that they can have you arrested, that they are lawyers, or that there will be repercussions that aren’t legally allowed.
- Contacting you repeatedly or at times you’ve asked them not to call.
I have a judgement against me. Can I just pay it and get it released?
If you have a judgement against you, you might be thinking that you should just pay the judgement and get it released. And it’s true, that’s one way to handle it. You could contact the judgement creditor and work out terms to pay the judgement. But that may not be a good idea. Why? Because they are pros when it comes to settling judgements, and you’re not. Here are just a few things you need to consider…
- How would you know for sure if they were telling you the correct balance?
- Do you owe interest and legal fees or not? If so, how much? And how do you know for sure?
- Is it possible to settle the judgement for a reduced amount? If so, how much? And how do you know if you’re getting a good deal?
- And then what happens after you pay them?
- The judgement is supposed to get “released,” but what, exactly, does that mean? And how – and when – does that happen? How long does it normally take? How will you know when you judgement has been released? And if it doesn’t get released, what then?
What is a judgement? How does it affect me, and what can I do about it?
A judgement is a court order that requires you to pay fine debt. Having a judgement for the debt is different from, and much worse than, just owing the debt. If you just owe a debt, but you don’t have a judgement for it, the creditor can harass you over the phone and send you bills and threatening letters (all of which can be very unpleasant), but they can’t really do anything to you other than that. If, on the other hand, you have a judgement against you for an unpaid debt, the creditor can seize and liquidate your assets (“take your stuff”), subject to certain limitations, in order to get paid.
With a judgement, the creditor can seize your assets, subject to certain limitations, in order to get paid. You may think that you don’t have any actual, physical assets that the creditor can seize, and you may be right about that, but that can still…
- Garnish your bank accounts. With a judgement, the creditor can garnish your bank accounts. This means that they can freeze your bank accounts (all of them) and take all your money.
- File lien papers in the real property records. The credit can file an “abstract of judgement” in the real property records, which can cloud the title to your home. It will be difficult or impossible to sell your home or refinance your mortgage until the judgement is released.
- Subpoena you to appear at a deposition. The creditor can subpoena you to appear at a deposition and require you to bring documentation about your bank accounts and other assets with you. Once they get the information about your assets, they will use that information to seize whatever assets they can seize.
- A judgement will damage your credit. A judgement is one of the worst things you can have on your credit report. And it can remain on your credit report for at least 7 years, and possibly much longer.
How long until my bad debt is cleared up?
The defaulted debt can remain on your credit report for 7 years.
If you look at your credit report clearly, there is a field called “Date of Last Activity” or “DLA.” The date of last activity is, not surprisingly, the last date any activity took place on the account. On a credit card debt, the last activity is the charge off, and the date of last activity is the charge off date.
The derogatory entry on your credit report has to drop off 7 years after the charge-off date. In fact, it is the date of last activity, as reported by the creditor, which triggers the credit bureau to drop the entry from your credit report.
If a credit card company sells your account to a debt buyer, the 7 year time frame does not get extended. Some debt buyers, however, erroneously report a new – and later- date of last activity when they purchase an account. “Reaging,” as this practice is called, is not proper, and you are entitled to have the derogatory entry removed from your credit report at the conclusion of the original seven years.
I know I have a lawsuit, but haven’t been served. How can I get a copy?
The lawsuit is a public record. You can go to the courthouse and get a copy. The letter we sent you has your case number and the court on it. So take our letter to the courthouse, and show the clerk. He or she will be able to get a copy of the lawsuit for you, or show you where you need to get a copy. In order to go to the court and get a copy of your lawsuit, you need to know what court your lawsuit is in. Depending on what county you live in, there could be dozens of different courts.
I’m getting sued. Can I just call them and make arrangements to pay the debt?
Sure, you could just call them and try to make arrangements to pay the debt. But it’s probably the worst thing you can do because it will (probably) cost you more and damage your credit worse than having someone help you. Plus, if you try to handle your lawsuit on your own, you might end up with the worst possible outcome: you pay the debt in full and still get a judgement on your credit.
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