Struggling with debt is stressful but when it’s paid off it’s easy to assume you’re in the clear. However, that’s not always the case.
There’s multi-billion dollar industry out there that preys on consumer’s prior financial struggles.
This kind of debt is like a zombie. It’s dead but it just keeps coming back. The only way it can come back to life is if you make it happen. Brian Willard is in the middle of this battle.
“I’ve been threatened to be arrested for it,” said Willard.
Willard is being harassed by collection agencies over a debt he paid off six years ago. At one point he did have a credit card that went to collections but he paid it off and has the letter to prove it.
“I’ve had probably around 30 or 40 agencies collecting on me ever since then who have threatened that they have papers from the Pierce County sheriff or from the court themselves and want to attach fraud to my name,” explained Willard.
I asked Becky House at American Financial Solutions, a nonprofit credit counseling group. House took a look at Willard’s file and is shocked by the situation.
“This is how many collectors he has calling on the same debt? Holy Smokes! That’s huge. That is huge!” exclaimed House.
House says companies wheel and deal debt like stocks and commodities. The problem is that some of the accounts being sold have been paid.
“If something doesn’t get passed along in that chain of electronic data, like this person paid this account in full. Now this company that is purchasing this new packet of debts from this other company, they’re not going to know that,” explained House.
The legislature has also spoken on this issue. Creditors get six years to take legal action on a debt. After that, all they can do is call you.
“There’s nothing forcing us to pay especially if it’s a debt that’s outside that timeline. So the way to do that is to scare people, to scare them into a payment. Sometimes you’ll have people that will do it,” said House.
The only way they can put you back on the hook for a debt is if you agree that the debt is yours. So if you are asked about old debt, ask the company not to call you anymore and hang up.
“It doesn’t even have to be a payment. In some cases you can just say the words, this is my debt and I can’t pay it or something to that effect,” explained House. “Admitting you owe the debt can be enough to bring that time barred status out and now they can come after you again.”
We’re helping Willard through the process, including notifying the credit agencies should they try to slap the debt on his credit report.
“At this point, I would really appreciate one of these companies serving me so in front of a judge I can show these payoff letters,” said Willard.
If creditors are harassing you for money you don’t owe, tell them to prove your debt in writing. Ask for their contact information. If you can get it, send them a letter saying they can no longer contact you. It should be sent certified with return receipt.
And finally, file a complaint with the attorney general.
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