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Dirty Creditor Tricks
Very tricky these credit card and debt collection companies, very tricky. They will use every tactic they can think of to get their money. Okay I understand that they want to get paid and I feel you should quit using credit cards and pay the bill if you can. But you have the rights to not be lied to. If you know their tricky maneuvers you are more likely to be able to avoid getting caught in their trap. Here are some, with more coming.

The Statute of Limitations
Once your debt is beyond the statue of limitations your creditor has no legal recourse against you. Even if they were to bring a lawsuit against you all you would have to do is tell the judge that the debt is past the statute of limitations and the case will be thrown out of court.

The statue of limitation requires that a creditor file legal action within a specified period of time. If they do not, they lose their legal ability to do so. The length of time does vary from state to state but it does start at the time of the last payment.

So here’s the dirty trick. If they can get you to make a payment of any amount the time that they have to sue you starts all over. So if you owe five thousand dollars you may get a phone call asking for the full payment. When you tell the caller that you can’t pay it they’ll start reducing the amount. They may even seem very sympathetic to you situation and appeal to your sense of decency. After asking for five hundred dollars they may ask for a good faith payment of fifty dollars. If you can’t send fifty they’ll finally accept five dollars because they know you want to do the right thing and they really want to help you.

So what happens when you send in the five dollars? The statute of limitations starts all over and they, being the nice considerate, kind, just wanting to help you do the right thing person, that they are, they will sue you for the entire five thousand dollars. Then when they get the judgment against you they’ll go a wage garnishment, a lien on your house or any other legal measure that’s available to them.

Here's where you can find out your state's Statute of Limitations.

Mysterious Payments
Debt collectors know that a payment will reset the statute of limitations. They also know that you're not likely to make a payment. So they take things into their own hands and make a payment to themselves in your name. Nice of them, huh? Well, no. They do this so that they can either sue you or at the very least use the threat of a suit to intimidate you.

Don't fall for this one. If a payment shows up on your credit report that you didn't make then it's time to contact the FTC.

We're Going to Sue You if You Don't Pay Us Right Now
Getting a call from a bill collector is bad enough but when they tell you that they're going to sue you it can really cause fear. That's why they do it. They can only tell you that you may get sued if it’s something that would happen on a regular course of business or is intended with respect to your particular debt.

If the collection agency is working on behalf of the original creditor then only the original creditor has the authority to decide to take legal action against you. A collection agency cannot initiate legal action on its own. All it can do is to recommend to the original creditor that legal action be taken. Only if the original creditor has given authorization to commence legal action, can the collection agency tell you that you may be sued. Some companies may give blanket permission to sue. In this case a lawsuit would be considered normal business procedure. But this is the exception not the rule.

But the words, “If you don’t pay your bill right now you’re going to get sued,” are so powerful, and often effective, that a collector will sometimes times let them slip out. Sometimes even on purpose.

If an account has been written off and sold to a collection agency then they can decide to sue you. But even then they can’t legally tell you that they intend to sue unless they really intend, and have the ability, either by having in-house attorneys or by hiring them specifically to bring suit, to do so. If they routinely sue then the collector can indicate that you will be sued if you don’t pay. If they don’t routinely sue, which is most often the case, then your specific account would have to have a decision made about it. Collection agencies generally want to go after the quick cash. They want to make to upset, and even cry, “Criers are payers,” as collectors say. They want to scare you and the threat of a lawsuit does scare people.

Creditors do sue. Collection agencies do sue. Please don’t misunderstand, if your bill goes unpaid you might be sued but don’t let the verbal threat of a lawsuit by a collector intimidate you because most of the time it is just a threat and often an illegal one at that.

You're Going to Jail
An even more aggressive, and scarier, tactic than the threat of a lawsuit is the threat of going to jail. And it's becoming very common. You can't go to jail for being in debt. Of course if you commit fraud that's a different matter but there is no debtor’s prison. But it is illegal to threaten to put you in jail. If this happens to you take good notes because there is a good chance that you could successfully sue the collector who's threatening you. Don't send these folks any money to stop them from having you arrested. Yes, it's happened. And the reason they keep threatening you with jail is that it is so scary and some people do send them money. Don't do it. Get as much information as you can about them and then find out about your right to sue them.

You're Going to be Audited by the IRS
Are there any more scary initials than IRS? Well maybe, but they are definitely near the top of the list. And in the spirit of "if it's scary, we're going to use it" debt collectors are now threatening people with IRS audits unless they immediately pay their bills. And, no, this isn't possible, or legal. Does it work? Yes. Should you pay them if they threaten to have you audited? No. Get information about who's threatening you and take action against them.

Making an Old Debt New Again
The buying and selling of old debt is a lively business. And there are many businesses that specialize in buying and collecting on old debt, debt that in most cases is past the Stat6ute of Limitations and beyond the seven year period for reporting bad information to the credit bureaus. But there not going to let these small details stop them from coming after you hard.

In fact some of them seem to have learned, perhaps with the help of a credit bureau, how to report that old debt in a way that makes it new again. So what, you say? Well this is direct and illegal attack against your credit report. And the reason they do it is simple, the mere threat of reporting you to the credit bureaus can cause some people to fork over a payment.

Here's an interesting article written by a credit report expert detailing the practice of altering the date of last activity and a letter that you can use to file a complaint if this has happened to you.

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Debt Calculator

See how long it will take for your debt to get paid off with one of these four options. We have listed a standard debt amount as a default on the debt calculator. You will need to enter your current personal or business debt amount below to see what your debt payoff amounts will reflect.

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Total Unsecured Debt $30,000.00 $30,000.00 $30,000.00 $30,000.00
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Interest Rate 18.9 % 12 % 10-12% Ave None
Total Interest Paid $49,978.53 $10,040.01 $21,300.00 None
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Total Cost
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Monthly Payments   Months To Get Out Of Debt   Total Cost To Be Debt Free
$900.00
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430
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$39,989.27
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PLEASE NOTE: This calculator gives you an estimate of how much it will cost you to get out of debt, how long it will take and how much your monthly payment may be with the different options to pay off your debt. Keep in mind "Minimum Payments" assumes you NEVER make any further purchases on your credit cards and the credit card companies NEVER raise the interest rate on your cards in the future from the rate calculated above. The "Debt Consolidation Loan" example is usually only possible when taking out an "equity line of credit" or "second mortgage", which involves securing your unsecured debt with your home. This is a very risky option for most people because the home could be foreclosed if you cannot make the payments.