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Beware of Debt Settlement with Junk Debt Buyers

November 17th, 2011 · No Comments · Debt Settlement

by Staff

Though it is a perfectly legal industry, junk debt buyers often engage in business practices that range from shady, to downright illegal. If you have old debt, it is essential that you understand your rights if and when (who am I kidding – when!) one or more of these collection agencies tries taking advantage of your lack of knowledge in this regard.

Every debt has a statute of limitations. It varies by state and the type of debt involved but there comes a time for every old debt when you are not legally responsible for it anymore. Yes, you still owe it, but you are not required to pay it back. Junk debt buyers, of course, do not want you to know that.

Junk debt buyers are also known as “bad debt buyers,” “zombie debt buyers” and, simply, “debt buyers.” As all of these names imply, these collection agencies purchase old debt – and a lot of it. As much as 70 percent of this debt is from credit card accounts, but they also purchase bad auto loan and retail accounts.

Here’s where you really have to be careful: If any of your old debt has reached the statute of limitations stage, any payment arrangement you make with a junk debt buyer will negate that and start the statute of limitations over. Why? Because making a payment on the debt implies that are affirming it, whereas what you should be doing is challenging the collection agency to validate that you owe the debt at all.

You should also be aware of the illegal practices junk debt buyers may try engaging you in:

1) pursuing debts that are not actually owned by the consumer in question

2) harassment or verbal abuse

3) multiple listings of the same debt

4) attempting to collect a debt that has passed it’s statute of limitations

Before settling on any old debt – with a junk debt buyer or any other collection agency – check the statute of limitations.

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