How Debt Gets to Collectors – Legal Consequences
When you become late on one credit card – your rates immediately jump up on ALL you credit cards. Including promotional zero-interest cards. And sometimes this goes retroactively back in time. Credit card companies explain that they can do this because you become a “high risk”.
As of today (beginning of 2009) late fees and over-limit fees are by far the single biggest profit center for credit cards (more than $4 BILLION annually). Those fees have now gone as high as $43 on some credit cards, with the average between $35 & $39 by most major issuers.
And unfortunately the lenders can legally do this – so pay close attention to your payment due dates. For more information visit http://www.101creditrepair.com
As you miss payments – this gets reported to CRAs (Credit Reporting Agencies). And the lender will start contacting you (either directly, or via a contracted collection agency).
If you miss the due dates on three payments, the lender will usually shut your card off, declare it in default and make demand for payment in full. Your rates and late payment penalties can quickly make your balance grow by 50% or more.
If you don’t pay for 180 days – they will charge-off your account so that they can get tax benefits for it. They will also turn over to collections. Usually just sell for 3-4 pennies on a dollar.
VERY IMPORTANT: keep records of all letters you get (bills, collection letters), especially the proof of the charge off date or date of last activity as reported to the credit bureaus by the original creditor, so as to legally ascertain when your state statutes kick in. The best way to legally document this is by obtaining a copy of your credit reports that denote this fact, which could become an important document in future disputes or legal proceedings. Keep the report for several years (7 years).
Note: the charge-off date determines two very important date marks for you:
1. how long the debt record will stay in your credit file (usually 7 years from this date).
2. the statute of limitations (SOL) date: how long the debt can be collected. It depends on the type of the debt and on state. Usually 4-6 years. Each state has its own rules.
For more information visit http://www.101creditrepair.com/resources
Note: Collectors can not change the date – re-aging of accounts is prohibited by law. But be careful. If a collector sues you on an “expired debt” (”Time Barred Debt”) – you still have to go to court to protect yourself. If you don’t show up – the collector wins “by default” – and now you will have to pay this debt plus legal fees plus you will get a new bad record on your credit report about the judgment – which will stay for 7 years.
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Dateline NBC – Credit Card Debt Trap Part 5 of 10
UPDATE 5/09: I have uploaded the new video which shows the documents that were passed back and forth from paypal to wells fargo merchant processor proving my cliams. Make sure to view it. In that one, there arecopies of the documents the bank provided proving they did not approve the chargeback and paypal is lying: For now, this video: Paypal fraudulant chargeback, BANK DID NOT APPROVE CHARGEBACK! Yet Paypal still is pursuing me and is claiming even after I handled evidence stating otherwise, that the buyer’s credit card company “ruled in the buyer’s favor”. LIE LIE LIE and I can prove it!
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This video highlights the insidious behaviour of large credit corporations as they manipulate everyone from college students to US lawmakers to fuel their greedy addiction to obscene profit at the expense of everyone.
Check this out, listen to this guy. He works for Paypal and admits I am right.
http://www.diydebtelimination.com/ – learn why DIY debt elimination is the best way to eliminate your credit card debt. Save at least $1125 in debt settlement company fees by doing it yourself.
http://DebtErasure.com/ – Just because you owe creditors doesn’t mean they have the right to harass, abuse or hound you. Did you know that most bill collectors and debt collection agencies have a habit of violating the rights of debtors? Just recently the debt collection company Advanced Call Center Technologies, was ordered to pay $1.5 million dollars to a debtor for harassing phone calls. 
The Debt Collection Agencies are Subcontractors of Wall Street. But these People who run the Debt Collecion Agencies are owned by people Who have Criminal Records in Street Robbery. Heres one thing Street Robbers and Wall Street Ponzi Scheme artists have in Common. They Screw the Middle Class.