Did you know your debt can take on a life of its own?
Heres our piece on the Debt Buying industry from last night.
Probably not as good as youd like.
Pamela Moore/Getty
It always seems like an uphill battle to build (and keep) a decent amount in savings.
But what if your car breaks down, or you have a sudden medical bill?
Ask one of these companies to help…
Heres what you better know.
Addressing Debt Earlier is Better
The first three to six months are critical in your debts lifespan.
And this is when things get trickier.
Its a night and day difference, early acting, Nitzsche explains.
How Do Debt Collectors Get My Debt?
Now a debt collection agency has your debt.
However, they aim to make money by recouping the entire amount.
Anyone who obtains the right licenses from their state canbecome a debt collector.
An agency may file a lawsuit and hope you dont show up in court.
Theres no limit to the number of times your debt will be bought and sold.
It will keep getting passed along from agency to agency, each time for a lower price.
The longer you go without paying, the less your debt is worth to these companies.
Lets say a deceased relative leaves you $1,000, but you owe $2,000.
If you offer the collection agency $1,000,it may just take it.
After all, some money is better than none.
Be careful, though; forgiven debt can haveincome tax implications.
Watch For Debt-Collection Scams
No matter what stage your debt is in, watch out for scams.
Consider working with nonprofits, which typically dont have big advertising budgets.
In other words,you wont see a Get out of debt fast!
infomercial on late-night TV from a legitimate debt counseling organization, he says.
Also, if yourejudgment proof, its much harder for debt collection agencies to come after you.
Know Your Rights
There area few things debt collectors cant dounder theFair Debt Collection Practices Act.
Agencies cannot harass or threaten you with violence or arrest.
Or use profane language.
Collectors cant pretend to be law enforcement or any other government official.
If a collector knows you have an attorney, it cannot contact you instead.
Your turn: Have you ever been contacted by a debt collector?
Find her on Twitter: @sarahkuta.
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