There are many among us who speciously believe that debt ends when their creditor ‘charges off’ their debts. But in reality it’s not so, because the creditor be it an individual or credit card debt collection agency can continue to collect or even sell your debts to any other agency, which may almost force you to make the re-payments. One should never be in the misconception that after a span of seven years, the outstanding dues falls off your credit file! The creditor might have restrictions in collecting it directly, but can very well continue resorting to other modes of collection prevalent in the market. Your state’s statutes of limitations might very well define the time period, within which the creditor or collection agency can take you to court, but though you escape being sued; you cannot escape the mental harassment & torture they can impart on you. Under such circumstances it’s always better for the debtor to pay off all the old credit card debts rather than facing such atrocities! Many among us believe that paying back the dues are a moral responsibility. But truly speaking the answer to this question is a lot trickier that it actually appears to us for a varied number of reasons as stated below.
Paying off old credit card debt could affect your credit score.
It has been seen that when a person, influenced by his moral obligation detects his old debts and makes payments for it, the creditors or the collection agency treats it as new debts & reports it accordingly to the FICO thereby hurting your credit score!
Even a call to your old creditor could leave you prone to litigation
Every state has its own guidelines on the time span for which the creditor can sue you for your debts incurred. But there do exists few states which allow this statute of limitations to be prolonged if you make any old credit card debt payment or even acknowledge the presence of an old debt. You could be making a good moral effort in paying back your dues, but the creditor on the other side could use this as a justification enough to drag you to court for your unpaid dues. This might not have happened had you not bothered to check your old debts once it’s charged-off.
Surprisingly you might not be speaking with your original creditor
It could happened that the company to whom you owe might have long back cleared your debts off their books, taken a tax write off for the debt or even could have sold the debt to some collection agency for money. It might even happen that when you contact the original creditor, he might direct you to some other collection agency.
You could expose yourself to few horrid lots.
Though there are various laws of consumer protection for creditor harassments, but the atrocities rendered by such agencies continue to harass the debtors till date. These agencies sometime hire individuals who lie, threaten, and abuse the debtors. They might even use foul language! Though such actions are illegal they still persist.
Thus though it is the moral obligation of every individual to pay off one’s dues, but I guess this article might have shed some light also on the disadvantages of trying to pay off your old credit card debt with the way the credit card debt collection agency sometimes behave.