On your credit report that is, and theyve already sold your debt to collections and you hvae like 20 negative marks from different businesses, does it really do any good to pay them off since theyve already scarred your credit, or just wait the 7 years tli they disappear?
2007-10-15 05:09:51 · 9 answers · asked by Anonymous in Business & Finance ➔ Credit
You can just wait, but if you do you are running the risk of being sued and ending up with judgments against you.
If this happens, they can attach bank accounts, garnish wages (if your State allows it) and file liens on any property you may own like cars, boats, land and homes.
All of this activity will also show on your credit for 7-years and make it very hard to get any type of loans without making massive down payments, paying huge fees and State maximum interest rates.
2007-10-15 05:18:33 · answer #1 · answered by ? 7 · 0⤊ 0⤋
This is not an easy question to answer.
It used to be you could just let it go and wait the seven years for a debt to fall off your report without much worry - at least for smaller debts say under 10K. These days that's risky. The norm these days seems for creditors and/or collection agencies to push even debts for under 1K to judgment. You don't want a judgment, that's for sure.
You'll have to check your state laws for the statute of limitations. Some states it's as short as three years - others seven. A creditor can not have a judgment entered against you if the debt is older than the statute of limitations, so this is a consideration certainly.
The downside to paying is that the negative (paid is just as bad as unpaid in terms of FICO score btw) is that the mark stays on your credit report for seven years after the date of last activity. The date of last activity is the last payment you made on the account or the time you agree to any sort of payment arrangements/agreement in writing.
So, say the debt is 6 years old, and they haven't (or can't because it's beyond the statute of limitations) pursued a judgment; in this case you are better off not paying. The debt will be removed from your report in a year. Otherwise, the clock starts ticking AGAIN the moment you make any sort of payment on the account and would stay on your report (as a negative!) for another 7 years! No point in shooting yourself in the foot by paying!
In terms of there being many negatives - if they are all for the same debt being reported by different collection agencies, chances are good that you can have most removed with a little or maybe lot of letter writing and very careful record keeping.
Also be aware that many collection agencies do what's called reaging - they alter the date of last activity to make the debt appear newer than it is. For instance, they may report the date of last activity as the day they bought the debt. This is an extremely common practice, it's against the law AND it lowers your credit score further. Newer debts are weighted heavier than older. A one year old late payment would lower your score more than a three year old late would.
If you'd like to be sure your credit report of illegal data read up on credit repair and The Fair Debt Collections Practices Act and the Fair Debt Reporting Act.
2007-10-15 06:58:23 · answer #2 · answered by riverbender 1 · 0⤊ 1⤋
Call them, and see if you can get a settlement on them. If they are over $1000 then the companys can contact the company you work for and demand to have it taken out of your pay check they can also put a hold on your bank account. If you work with them, they should be able to help you get back on track... Anything that just "dissapears" after 7 years... means that you will have to wait an additional 7 before your credit starts to return to you. Paying as much as you can as often as you can to these creditors will help your credit in the long run. Good luck.
2007-10-15 05:19:05 · answer #3 · answered by shadowsthathunt 6 · 0⤊ 0⤋
It depends on weather or not you want to spend your entire life being afraid to answer the phone, or afraid every time you answer the door it might be a friendly government worker serving you with a lawsuit.
They dont just "go away" if they are unpaid... you will be sued by at least a few of your creditors, and they will hound you forever.
You borrowed money and you make a promise to pay it back... so you should do the right thing, call the companies up and work out a settlement.
You will feel better about yourself, and it is the right thing to do.
2007-10-15 05:42:12 · answer #4 · answered by Mike 6 · 0⤊ 0⤋
As another poster already mentioned yes they can sue you so you do need to be careful. However depending on the state you live in they only have so many years to sue you once that statute of limitations is up they can no longer sue. If they threaten to sue it may be a good idea to settle for less than the full amount just to avoid the lawsuit but either way they will stay on your report for 7 years and paying them will not help your scores.
Remember: Always try to get them to agree to delete the trade line completely when making a deal and always get it in writing.
2007-10-15 05:25:46 · answer #5 · answered by Delaina77 3 · 0⤊ 0⤋
For starters, there are a lot of terrible answers here. The only decent one is from Delaina77.
Forget everything else mentioned....here is your problem. You have (you claim) 20 negative marks on your credit! You can clear 75% of them, but those remaining 5 are still going to kill you! In other words, I seriously doubt you are going to dig yourself out of this hole without some serious work.
For now, here are things to consider.
1) These items fall off automatically after 7 years, beginning from the date of the delinquency (not the last transaction as some folks posted here....they won't do their research!)
So if you have any old debts (over 5 years) I would consider ignoring them.
2) Check the statute of limitations (as Delaina77 suggested). The average is 6 years, but some are 4...check it out! If the debt is over that age then ignore it!
3) Collection agencies do not mess with small debts of under $500 unless they have an office near you, making it convenient for them to sue. Otherwise they need to hire an outside agency/attorney...that costs them money. They prefer to just harass you. But if the debt is over $2000 you are going to be a target. Consider negotiating these...but do not pay unless they agree to delete the negative information from your report.
2007-10-15 08:02:10 · answer #6 · answered by Anonymous · 2⤊ 1⤋
It is always better to pay because when you pay, even that information goes on your credit history and after you have cleared all your payments, you can call the credit reporting agency to verify the status of your credit rating and report to them of your latest "all cleared" position so that next time you are using the credit, they do not give negative report. This way you can avoid 7 years waiting time period.
2007-10-15 05:16:45 · answer #7 · answered by ashok 2 · 0⤊ 0⤋
The 80%+ of credit limits charged on the enjoying cards is probable the element it relatively is dinging your credit the main- you may even have had inquiries which will additionally cut back your scores. attempt to get the enjoying cards all the way down to decrease than 50% of the bounds and you may see an progression in case you're paying each and every thing else on time. good success!
2016-10-06 23:32:34 · answer #8 · answered by ? 4 · 0⤊ 0⤋
If you don't pay, they can take you to court, get a judgment, garnish your wages, attach your bank account, and lien your property. The judgment will be on your report for 10 years.
Paid negatives always look better than unpaid ones. Creditors look at more than just your score. They look at the whole credit report.
2007-10-15 05:20:04 · answer #9 · answered by bdancer222 7 · 0⤊ 0⤋