Zombie debt collectors dig up your old mistakes..

[IGBT]

Text

As a student in Fort Worth, Texas, she maxed out a Citibank credit card with a $300 limit and never paid the bill. Debbie said Citibank charged off the debt sometime between 1987 and 1989, and the liability has long since disappeared from her credit report.

That?s why she was stunned when a collection agency called her last summer, demanding she pay the 17-year-old bill. The calls have continued off and on since then, along with monthly bills listing varying amounts that the collection agency wants her to pay.



Today, however, collecting on old debts is a rapidly expanding industry. Aggressive companies can buy charged-off credit card accounts from the original lenders for pennies on the dollar. Then, they use credit scoring and other new technologies to identify which debtors are most likely to pay. The players in this ?junk debt? market range from fly-by-night outfits to well-established companies funded by Wall Street investors.

 

[z0mb13]

whoa talk about digging up dirt..

 

[IGBT]

..may be tip of the iceburg. Next the'll be "selling " privacy..watch. It's comming.

 

[Safeway]

Yea ... this is insane. Thankfully, I have a 100% positive credit record.

 

What's wrong with forcing people to pay back their outstanding debts? Whether or not Citi charged it off, it's still money she owes to Citibank.

They way they're doing it might not be on the up-and-up, but conceptually I see nothing wrong with it.

 

[pulse8]

I was under the impression that after a certain amount of time that the bank couldn't come after you for the debt if they haven't contacted you during that time.

 

[CubicZirconia]

Maybe she shouldn't have run up the debt in the first place.

 

Originally posted by: CubicZirconia
Maybe she shouldn't have run up the debt in the first place.

:thumbsup:

 

[mercanucaribe]

I don't understand how the debt just disappeared... Maybe I should run up a huge debt so the bank will "charge it off", whatever the hell that means.

 

[IGBT]

..I guess they never really charge it of but sell it for pennies on the dollar to midnight collectors.

 

[CubicZirconia]

Originally posted by: mercanucaribe
I don't understand how the debt just disappeared... Maybe I should run up a huge debt so the bank will "charge it off", whatever the hell that means.

Probably not a good idea. As I understand it, when an organization charges off a debt they are writing it off as uncollectible, thereby decreasing net income and their tax liability. Not only will this damage the debtor?s credit, the debtor will legally still owe the money. This is where the selling of uncollectible accounts comes in.

 

[b0mbrman]

Originally posted by: jumpr

Originally posted by: CubicZirconia
Maybe she shouldn't have run up the debt in the first place.

:thumbsup:

:thumbsup:²

 

[Freejack2]

I understand that people should pay their past debts but these zombie debt collectors sound kind of scummy.
I could see some couple getting ready to buy a house and the wife or husband has some debt that got charged off 15 or 20 years ago for say $150. The zombie debt collectors would come in threating to ruin their credit report unless they paid $600 ($150 + back interest and charges of $450). Yeah the person should pay the $150 but to blackmail them for $600 is just wrong.

 

[IGBT]

..more and more it looks like nothing is forgiven or forgotten in the information age.

 

[alent1234]

Originally posted by: mercanucaribe
I don't understand how the debt just disappeared... Maybe I should run up a huge debt so the bank will "charge it off", whatever the hell that means.

the creditor can charge it off as uncollectable and it vanishes off the credit report 7 years after that. In some states it's 5 years.

 

[CubicZirconia]

Originally posted by: Freejack2
I understand that people should pay their past debts but these zombie debt collectors sound kind of scummy.
I could see some couple getting ready to buy a house and the wife or husband has some debt that got charged off 15 or 20 years ago for say $150. The zombie debt collectors would come in threating to ruin their credit report unless they paid $600 ($150 + back interest and charges of $450). Yeah the person should pay the $150 but to blackmail them for $600 is just wrong.

I'm going to have to disagree. It's called the time value of money, and it means that 150 dollars 15 years ago is not 150 dollars today. And let's not forget who the real victim is here. It certainly isn't John Q. debtor that decided he wasn't going to pay his bills back in college. It's the business that got screwed out of profits because Jonny didn't pay his debts.

..more and more it looks like nothing is forgiven or forgotten in the information age.

Two words: debtor's prison.

 

[CrackRabbit]

Originally posted by: CubicZirconia


Two words: debtor's prison.

And do you have any clue as to how many people would be in it?

 

[CubicZirconia]

Originally posted by: CrackRabbit

Originally posted by: CubicZirconia


Two words: debtor's prison.

And do you have any clue as to how many people would be in it?

My point was that things have gotten better for debtors, not worse.

 

[jpeyton]

What these idiots don't know is that if the debt is older than 7 years, you're doing damage to your credit report by actually paying it off.

These "zombie" debt collector's are preying on the naive. Their threats are idle.

My suggestion before paying off ANY debt to a collector (especially significant ones) is to spend a few bucks to talk to a real credit/financial consultant who knows a thing or two about these things. It's not always in your credit score's best interest to pay off old debts, even though it may be morally right.

 

[iwearnosox]

Originally posted by: jpeyton
What these idiots don't know is that if the debt is older than 7 years, you're doing damage to your credit report by actually paying it off.

These "zombie" debt collector's are preying on the naive. Their threats are idle.

Exactly. If they want people to settle these old debts then they need to offer some kind of amnesty to do it. By making *any payment* to a chargeoff you are restarting the credit report clock on that debt. Odd as it seems, you're better off not paying it.