Creditwrench teaches the secrets of the debt collection industry and how to defeat their abusive practices without lawyers. We know how to win!
Wednesday, March 19, 2008
Pay your debts and exercise in futility at the same time.
Questioner: Gloria
Subject: Collections
Hello. I am in the process of paying off my debts. I only have 2 negatives items on my report that are and have been in collections for about 5 years now. I owe a combined total of $1,000. I have heard many rumors about paying the collection agencies. Is this worth it? Is my money going towards improving my score? Should I take care of it and pay them? How long will it take to show up on my credit report/score? Are there any necessary paper work that I should request once i make this payment? Is it legal and safe to pay over the phone?
Please help! Thank you!


Can you say "exercise in futility"?

That's just about what you are doing. Here is why. Your score isn't going to improve any because you pay off that $1,000. The debts are now too old to make any difference in your score and are also such a small amount that they won't increase your overall available credit by any appreciable amount.

You have already done about all the damage to your credit score you are going to do because in another 2 years or so they won't show up on your credit report anymore.

The major reason paying off your old debts hurts your score more than it helps is because although you paid them off new creditors will also recognize that you had to be forced to pay them off by debt collectors and that never looks good.

Normally I would recommend that you don't pay them another crying dime but with only another thousand to go the question has to become one of whether you would rather keep the thousand for other purposes or go through the hassle of getting sued and having to learn how to beat up on the debt collectors in court, making them pay you instead of you wasting more money on the current exercise in futility in which you are engaged?

It isn't a question of the $1,000.

It is a question of just how angry you are about their having duped you into believing that paying them would somehow help your credit score. Even if they aren't guilty of that they are guilty of not telling you the truth about what paying them would do to your credit score which is actually the most important issue of all.

They didn't tell you that paying them was going to hurt your credit

more than not paying them, did they? Of course not. They probably told you or at least hinted that if you didn't pay them they would take you to your local kangaroo court , get a judgment and then garnish your wages, your bank accounts, put a lien on your home, take your car(s), your boat, your gun collection, your coin collection and all else they could find in your home.

Maybe they even threatened to have you thrown in jail which, of course, they could not do. And I'm quite certain that they didn't tell you what all your rights under the law are and how they were blatantly and with malice aforethought violating them.

I'm also quite certain that they didn't tell you that you have the right to sue them in federal court for each and every one of those violations or how to get a bare minimum of $1,000 or more for their abusive debt collection practices, make them take it all off your credit reports, promise never to bother you again, promise never to sell, assign or even give away the debt they claimed you owe and pay you to go away and leave them alone.

I'll bet they also never told you that you might be able to make them pay you attorney fees for your time and trouble learning how to do all that, now did they? I'll bet they never told you that you might even be able to make them pay you back all the money you paid them plus interest and pay you for the damages they did to your credit reports, now did they?

While debt collectors and attorneys alike may be as dumb as fence posts and greener than gourds about the laws debt collectors must obey, all of them are at least smart enough to know that if their victims knew about all those things and how to make them work they would really be shooting themselves in the foot.

The burning bush question simply has to be one of whether you would rather remain on your present course of action because you have so little left to pay off or whether you will get mad about all the abuses they have heaped upon you and all the money they have taken from you, the sleepless nights worrying about how you are going to meet the house payment and pay them too, the things you could have had but couldn't afford because you had to pay those debt collectors.

What will you do ? Take the easy way out and pay the last $1000, get no receipts for your payments and take the chance that maybe 5, 10, 15, 20 years from now they or some other debt collector might decide to come after you again for the same debt knowing full well that you probably don't have any receipts and can't prove you paid the debt so you will have little or no other option but to pay up again plus interest for all those years?

They are pretty certain that you don't know about the statute of limitations or how to present a SOL defense in court so they can easily get a judgment against you or make you pay again. If you think that don't happen then think again because it happens a lot more than you would imagine. So what will you do? Pay or fight back?

Bill Bauer
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