“Dear Steve,
In the early 90s my roommate lost his job when he contracted hepatitis and was out of work for months – at some point I got the illness from him and then I could not work for a couple of months. This meant several months where I was paying our rent and other bills with credit cards.
I tried writing to ask all of my card carriers to either suspend the interest or lower my required payments – all refused. Someone told me that as long as I showed good faith by paying something on my debt, that I would not get into trouble. As I was recovering, one month I sent partial payments to 4 card companies. My checks were returned and phone calls came saying that I could no longer submit monthly payments because I had defaulted on my contracts and entire amounts were now overdue. I was abused and threatened by daily calls from collectors. I stopped answering my phone after 1992.
I did satisfy the two smallest debts – paid one in full and settled for 60% or so on the other. Then when I called the third collector to ask if I could send a check with the advertised discounted pay-down via Express mail, I was told they would not accept it, even though I called on the final day of the possible agreement. Then I said I would wait for the next offer in the mail and was told ” That will never happen.” and I was verbally abused and hung up on.
Since then I noticed that in the occasional letters offering Pay-down amounts, wording has been changed where I am now informed that I “might” choose one of several options to pay a percentage or pay the entire debt on a monthly rate. No where in the letters does it indicate that they will honor my selection. I have heard bait-and-switch horror stories from friends about letters with this wording. I have been afraid to answer any of these letters for years now. Now my accumulated interest shown on these collection letters for two remaining card debts is higher than the original total on all four cards.
I am nearly 64 years old and paying these debts in full (especially with all the interest) will wipe me out. As a musician, I have been chronically underemployed and am afraid I will not be able to work much longer.
Who can I trust to tell me the truth about whether these old debts are owed in full with all interest (accumulating at high 1990 rates? Is it there a reputable group who can force the collectors to accept rolled-back figures? It has been hinted to me that perhaps these old debts are no longer collectible, but I would not feel right not trying to settle. I should have filed for bankruptcy years ago when I was out of work, but my conscience would not let me.
Jerry”
Dear Jerry,
How long do you have to punish yourself before you have paid your penance?
I am so sorry that you’ve had to live through this for all these years. Your contracting hepatitis was not fair, nor the abuse you took from the debt collectors. And neither was the lie someone told you about partial payments. Creditors don’t have to accept a partial payment and as you learned, many won’t.
There is the myth that people who go bankrupt are losers or bad people. It is a myth that creditors want you to believe. Over all my years I have not met bad bankrupts, just good people with bad debt.
With your income years dwindling it would be more responsible for you to finally put this old debt to rest and go bankrupt. I’m not suggesting bankruptcy as a way for you to walk away from debts that you owe for malicious reasons. Bankruptcy is a legal way to terminate debts in a way that creditors and collectors have to honor. If there was another way to trust either that they would honor their word and promise, maybe I’d suggest a different alternative for you.
If it wracks you with emotional pain to go bankrupt, consider this. There is not one thing that prevents you from going bankrupt to put these debts in your past and then repaying what you can afterwards if you want. Did you read that clearly? You can go bankrupt and honor your debts. The bankruptcy will discharge the debt and stop all legal action and collection activity, then for your own internal reasons you can still send payments, partial payments or whatever to the creditors latter if you feel so compelled.
You’re 64, an underearner, and a lingering debtor. Do the responsible thing and take responsibility for your old debt by putting it to sleep with bankruptcy so you can focus on creating a safer financial life as you get older.
If you want, click here for bankruptcy information.
You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.
Do you have a question you'd like to ask me for free? Go ahead and click here.
- Plastic Pandemic: US Credit Card Debt Surges Nearly 20% in Q1 2021! - May 12, 2023
- The IRS Resumes Collections Notices: What You Need to Know Before It’s Too Late - May 12, 2023
- How Can I Deal With Payday Loan Debt? - May 12, 2023
Excellent comment.
The issue is that the statue of limitations varies by state. To be 100% certain that these debts are no longer collectible you’d have to review the situation with a lawyer that is licensed in your state.
The bigger issue these days is zombie debts. Debts that resurface again and again that are still being bought and sold by collectors. While bankruptcy might seem like overkill, it is a legal tool that once implemented will end these debts for good so Jerry can move forward with the rest of his life.
Wait, these debts are from the 90’s? Wouldn’t that put them outside of statute of limitations, and past the reporting period as per the FCRA?
I, m not a credit repair expert by any means, I’m in the debt settlement arena, but there are laws to protect consumers and if there is no judgment on the accounts you may want to talk to a legitimate credit restoration/repair agency. Be wary, there are a lot of scam artists out there, but there are some good ones too.