Do you have bad credit?
Do you know someone that has bad credit?
Are debt collectors calling you all the time? Sometimes they can get pretty nasty.
Let me share a little knowledge about bad credit and debt collectors.
This would apply to credit card debt and other ‘unsecured’ loans.
Unsecured means that the bank or credit card company is not holding any collateral in lieu of the loan. In short, they have nothing hanging over your head.
They made a decision to extend an unsecured line of credit.
In contrast, with a mortgage or a car loan, they can take your house or your car when you default on payments.
Not so with credit card debt. Oh, they talk about ‘judgments’ and that they’ll get a ‘judgment’ against you.
Here is what you tell them when they talk nonsense like that:
“Well if you come to my home town and sue me here, maybe you can get your money then”.
The truth is, they won’t. In fact, they don’t have a legal leg to stand on but they will try to tell you that they do. The original company they bought the ‘bad debt’ from extended a loan to you ‘unsecured’. That means they have nothing to fall back on if you don’t pay. NOTHING.
I’m not telling you this so that you go out and run up large credit card bills and cash advances only to not pay it back. Not paying back what you owe is morally and ethically wrong. You will also definitely get a bad credit rating which could affect you in many ways for a long time.
The reason I’m letting you know about this is because it makes me sad to see ‘debt collectors’ calling people and intimidating them anyway they can to get money out of them.
In the first place, the original credit card company ‘charged off’ your debt and took a tax deduction for it.
Then some debt collecting company came along and bought the ‘bad debt’ for pennies on the dollar. Then they write to and call you in an attempt to get you to pay them.
Enough people do pay them that they recover the money they spent to buy a bunch of bad loans that someone else has ALREADY taken a tax deduction on. In addition they make a handsome profit, especially if they convince you to pay the full amount of the loan plus interest.
The bad mark you have from the original company will stay with you for 7 years. Then it will ‘roll of’ your credit report and no longer affect your credit rating or scores.
So the next time the debt collector calls you, tell him what you know. Once they know that you understand the real deal, they will probably move on to someone who they can convince to pay. After all, they aren’t going to waste their time with someone they know they can’t get any money out of.
Of course, if you have bad debt, you should pay it. That is just the right thing to do.
This post is not professional advice and is only an opinion. It is for information purposes only. No warranty is given as to the accuracy of this information. It may not be accurate for your particular situation. You should consult with an attorney or other financial professionals before taking any actions and you should NOT base your actions on this opinion piece.