If you’re struggling with debt, then you know that creditors aren’t the shy, quiet and withdrawn type. In fact, they’re loud and aggressive — and possibly even behaving illegally. To put it another way, if they were to try a car wrap to convey their nasty message, they would get pulled over and charged for uttering threats.
However, there are three things that even the most violently communicative creditors won’t talk about. But here at bluntmoney.com we’re all about delivering the straight goods and empowering you with knowledge, so here you go (and you’re welcome!):
1. There is a statute of limits on debt.
If the debt you owe is “beyond statute,” then you cannot be sued for payment. It doesn’t matter if a creditor recently sold the debt to a third-party (which often happens). The limitation period doesn’t extend when a debt is transferred. If that were the case, creditors would simply continue selling debt over and over again to avoid the time limit. Keep in mind, though, that statues vary by state and the type of debt. Click here for an overview.
2. If you file for bankruptcy, all communications and actions must cease and desist.
Those harassing 6:00am phone calls? Those hyper-aggressive letters WRITTEN IN CAPITAL LETTERS? Those threats — which may have been carried out — to garnish your wages. All of this must come to a screeching halt if you file for bankruptcy. This is something most creditors don’t want you to know, because it means instead of trying to grind you down, they will have to communicate appropriately with/through the court-appointed bankruptcy trustee. They will also have to get in line with all other creditors, which is the last thing they want.
3. You won’t lose your home and your credit rating won’t get permanently destroyed.
Creditors are crafty. If they warn you against filing for bankruptcy and you call their bluff, then expect them to switch tactics and spin a Steven King-like horror story about what’s going to happen to you: you’ll be homeless, your credit rating will get destroyed, and you’ll be poised for a lifetime of financial pain. Simply put, this is untrue.
Depending on your state, it is extremely unlikely that you’ll lose your home — and it’s never going to happen if you are caught up on your mortgage payments, or if you file for chapter 13 bankruptcy and the trustee approves your debt restricting and payment plan (which typically lasts 3-5 years).
And as for your credit rating destruction: that’s not going to happen, either. Yes, you’ll take a hit depending on what your score is right now (i.e. the higher your current score, the larger the drop). But you can start rebuilding your credit score right away through products like secured credit cards. If you pay all of your debt in full and on time, you can expect to qualify for a car loan in about a year, and a mortgage in a couple of years. You may even find — and a lot of people do — that your credit score climbs much higher after bankruptcy than before, because you are making much smarter financial decisions and your creditors love you.
The Bottom Line
Being in deep debt sucks. And having creditors threaten you and disrupt your life just makes things harder. Their end game is to intimidate you into paying up. Don’t fall victim to this. Get the facts you need to fight back and get out of debt safely, securely and with the power of the law behind YOU — not your creditors!