Old Credit Card Debt
Getting a new credit card and starting a new financial life is not that easy as it sounds. You have to settle the old debt. Your old lenders will haunt you until pay them the due amounts and of course they will see that they extract some extra money from you. But don't worry. This article tells you about how to deal with your old credit card debt so that you can repay your old debt by saving some for your future income and still have a clean credit record. Well, the process may take some time. It depends on your debt amount, type of debt, and your passion to have a clean record. Before knowing how to pay old debt, it is advisable that you are aware of the old credit debt law. To know more about that, read on.
The Law
There are various provisions in the old credit debt law that you must be aware of to save yourself from the lenders. Given below are certain things that you must always keep in mind:
Statute of Limitations: The old creditors and lenders have a specific period after which they cannot sue you. This time limit is set by statute of limitations. Anybody threatening you to sue after this period is over is breaking the law. So you must be aware of your state's statute. This time limit is generally three to ten years or more.
Time Barred Debts: Once the time limit is over, your debt becomes a time barred debt that cannot be challenged in the court of law. For example, if your creditor files a case against you then you can dismiss the case by letting the judge know that it is a time barred debt case.
Legal Procedure: The creditors can file a civil case against you only in the jurisdiction where you signed the contract or where you live and not anywhere else as per the creditor's conveyance unless the contract mentions that laws governing the home state of creditor determine the course of action or so.
Time Frame: If the creditor wins the case you will have to bear with that information on your credit card for seven years. After seven years you may come in clean. Statute of limitation and record of debt on the credit report are two different things. For example, in case of bankruptcy, the mention of it will remain on the record for ten years even if the statute limit is over.
Re-Aging the Debt: The statute limitation period may start afresh if you acknowledge the debt or pay some amount etc. anytime during this period, especially when the debt is approaching the statute of limitations. So it is better that you do not recognize the bad debt to avoid the whole new debt collection law suits.
There are lot of other things you should know about creditors so that you are at the advantageous position. For example your creditors cannot threaten you to sue without taking an actual action or threaten you with jail term or arrest or use abusive language. Apart from this, debt collectors have to call you between 8 a.m.- 9 p.m. Calls before or after that are illegal. Along with this, they cannot call you and bug you with repeated calls. They cannot even talk about your debt or mar reputation by publicly talking about it. They should only talk to you or your attorney and nobody else. These were some of the important points of the debt law. But you must contact your lawyer or debt counselor and know about the law of state in details.
Paying Off Old Debt
Whatever happens to the lawsuit, you have to pay your debts somehow. So get ready for that. You must start with your credit report and studying it thoroughly. First, you must make a list of creditors that you owe money to, such as, landlords, insurance companies, services you used, etc. you need to contact them and find out the due amounts. When it comes to the debts that are past statute of limitations, you have options. You may seek credit counseling that would help you judge the situation better. Once you decide to clear your credit history by correcting the bad credit then you need to prioritize the debts. Better to pay creditors who control the basic necessities of your every day life, such as, rent or mortgage payment, car payments, health insurance, and other utilities etc. Also start with debts with higher interest rates so that you save some money in the long run. If all the debt loans are with a same interest rate then start with one with low balance so that you get the sense of accomplishment and the journey starts with a positive note. With these tips it's easy for you to repay the loans. I know credit repair is not easy that is why it's said in the beginning that you must have passion for good credit and it is indeed commendable to clear the debts and set a good record again.
With this information on, I am sure you will be like a phoenix bird that raises from ashes to reach the glories.
