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Britt Erica Tunick is an award winning financial journalist who has spent the past 17 years writing about virtually every aspect of finance. She has mastered the art of boiling down complicated financial topics for readers to understand. |
Maybe you have got an old debt you never paid, but it is beyond the statute of limitations so why worry? Well, perhaps it IS time to worry. We have the reason why. Why Old Debts Could Come Back to Haunt You By Britt Erica Tunick If you have old unpaid debt that extends back beyond a certain number of years there is technically nothing debt collectors can legally do to make you repay that debt. That doesn’t mean they won’t try, and in many cases succeed. Debt collectors have become increasingly aggressive in their efforts to collect on unpaid debts past the statute of limitations (which varies from state to state) for collection. In fact, over the past couple of years debt collectors have begun taking advantage of a loophole in the legal system that not only enables them to file lawsuits to collect on such unpaid debts, but to prevent the individuals from whom they are collecting those debts from fighting back in court. Third party debt collectors, who purchase delinquent accounts from companies the individuals originally borrowed or purchased goods from, have begun filing lawsuits against such individuals to compel repayment. Since most of these borrowers fail to show up in court to challenge these lawsuits, or actually overlook notification that such suits have been brought at all, debt collectors have been successfully winning most of these cases and are granted to right to garnish the pay or bank accounts of the people from whom they are seeking repayment. Though the individuals sued over debt that has passed the statute of limitations for collection technically have the right to fight back, in most cases, they are unable to do so through the court system. That’s because these same debt collectors have been taking advantage of the fact the original borrowing terms people agree to usually require the settlement of any disagreements takes place through arbitration, instead of the courts. Since class action suits are banned from arbitration, that means anyone sued for payment of outdated debts will be forced to absorb the costs of fighting debt collectors through arbitration on their own an expensive proposition that keeps most people from doing so. |
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