Debt Collection

[light trip]

With Debt Collection, even medical - Your Bank Account Could Be At Risk.

http://www.npr.org/2014/09/16/348709389/with-debt-collection-your-bank-account-could-be-at-risk

 

[highdesertranger]

yeap, no due process. this is going on a lot nowadays. gov does this too. highdesertranger

 

[Van-Tramp]

Well, as sad as it is, I can't really feel all that sorry for someone who racked up debt when they were younger and years later can not pay for it. Eventually the banks take extra steps to recoup their losses, I don't see this as anything out of the ordinary.

My son, who is a junior in high school, realized that he is not being taught the basic necessities for when he graduates. He doesn't know how to balance a check book, get electricity for a new home, and certainly not how to deal with debt or stay away from it all together.

I went through it myself, in my 20's racking up $5k or so in credit card debt (student credit cards). I was unable to pay it for many years, so the debt slowly increased to nearly $20k. I suffered through many years of the creditor calls and threats. In my early 30's I finally called each of the creditors, offered them 30 cents on the dollar (of which all but Citibank accepted) and I paid off the debts over the phone. It all came out to that original $5k give or take. It took another year, but Citibank sold off that debt, and I immediately called the new creditor and they too accepted the 30 cents deal. I've been 100% debt free every since.

To avoid the issues that the above article spoke of, I did not have a bank account until I was 38 years old.

Teach your children how to deal with debt so they do not make the same mistakes.

 

[jeanontheroad]

When our kid was in high school, we started making him sit in on the budget discussions every month. He learned why he couldn't have everything he wanted and how much it took to run a middle class household. That knowledge came in handy when he determined how he wanted to make his own living and when he set up his own household.

 

[morongobill]

Lots of seniors getting their social security garnished
for student loans they cosigned on behalf of a child or grandchild. Federal student loans are for life.

 

[Spirituallifetime]

I refused to cosign for student loans for my kids! Both are now working and paying for their school, and will have more respect for their education and hard work! But I do have to work on teaching them about credit One of them asked me what my credit score is and I said I have the best score you can get it's 0 she was confused by that, I am not a slave to no bank!

 

[jeanontheroad]

An excellent credit rating is a good thing to have. One should value it and protect it. A credit rating of "0" and no credit history can be harmful. If you want to get an apartment, buy a home or a car, start a business, or shop online, or meet an unexpected emergency expense you need the banks to know who you are and that you are financially responsible.

 

[Spirituallifetime]

In order to maintain a good credit score a person must be in debt continuously, this means buying some thing on credit whether its a car on a 6-8 year loan or using a credit card to buy things occasionally. I don't recommend this to most people because they don't pay off the debit before racking up more debt, before they know it they are thousands of dollars in debt and no way out! Then if that isn't bad enough loose your job then you loose every thing, if all your assets are bought with debt you can't keep it if you can't pay on the debt! I try to teach my kids its better to have money in the bank than to have a mail box full of bills from debt collectors. Lots of bills from debt collectors means all you do is work to pay and no time to play. This causes stress and couples get divorced over the stress and money problems.

 

[VanLifeCrisis]

They can get a judgement on you if they do actually sue and you don't show up, but each state has different rules about how much they can garnish from you even with a judgement (usually they have an automatic cap at a certain % of income). This is to prevent situations like those above, where such a garnishment could endanger their welfare (ability to buy food or utilities). In my state you can proactively file for exemptions to protect a surprising amount of things above that too, like extra 'living wages' and retirement benefits etc after they already get the judgement (strict timeframes though). The only one who can garnish your social security is the government itself (student loans count unfortunately )

 

[LeeRevell]

I had a period some years back of credit card debt - screwed me up badly. But, I worked it out, paid it off, and now have one CC with a limited credit amount, which I can keep paid off. I check the account daily via online, that really helps. The paper notices are always at least two weeks out of date, so easy to lose track......
A couple times the CC company tried to 'reward' me by upping my credit limit - I call them and have them put it back to the lower amount. Have had the CC number used illegally a few times (twice via PayPal, I avoid them like the plague now!), but he company is quick to get it made right. Have gotten my money back after filing fraud report and getting new card.
Had a smaller CC once, with a very limited credit limit - they allowed a foreign entity to suck it dry at twice the limit amount, and would NOT help - I believe they were complicit in the crime - AVOID First Premier Bank at all costs! They are crooks!
I keep a very close watch on my CC account nowadays. I do not want to get those incessant collector calls again! They even call family with NO connection to the problem - that is embarrassing and should be a crime itself.
I have had a good credit rating for a few years now, and have no problem purchasing vehicles, etc. It took years of hard work, and I'll not lose it again.

 

[wagoneer]

Gotta have a cc. just pay the balance in full every month. Cash for everything else.

 

[jeanontheroad]

We have 1 cc each. Women, do not think you have credit just because you are on your husband's card or bought a house/car with him. After 25 years of doing that up north, DH had a wonderful credit rating, but when we moved south, and I wanted to start a business, I couldn't even get a $300 charge at Office Depot. (DH will lose a receipt between the store door and the car.) We fixed that by buying a car with my name listed, first on the loan and DH as the cosigner. Even then, after being given specific instructions, the salesman had the paperwork made out with DH's name first and was miffed at being told to go back to his clerk and change it if he wanted to sell the car. I had the job and the income, but it was DH who had the sterling credit rating. The credit companies had no idea who I was.

I know that laws have supposedly changed this, but I still don't see that reflected when I check my credit reports. So, I now have my own card. We live on DH's income and leave my SS in the bank for taxes, insurance, major purchases. I put that stuff on my cc and pay it off with a bank transfer. That way, I keep an excellent credit rating and our monthly living budget stays stable.

 

[Starting My Own Journey]

Yep!

I had a joint account with my boyfriend where I was putting in as much as him. He had some old debts I wasn't aware of and they sucked the account dry! I was pissed! How were we going to pay rent? buy groceries? lights?

I learned several hard lessons that day!

 

[Optimistic Paranoid]

Jean,

You've raised a very good point.

You ought to consider re-posting this down in the Girls Room as a separate thread, maybe titled Women and Credit. There may be a number of women here not paying particular attention to this thread.

Regards
John

 

[66788]

I've worked as a bankruptcy attorney for many years and I am amazed at the number of people who liquidate IRAs and sell personal items to pay debts. The bankruptcy laws were made to give people a fresh start, which is what most people need. Don't liquidate that retirement plan or sell anything without first consulting a good bankruptcy attorney. In most cases the retirement accounts and personal items can be exempted from the bankruptcy and kept and the underlying debt can be discharged. Even delinquent income tax debt can be discharged under certain circumstances.

 

[ccbreder]

Garnishing a bank account or pay check requires a lot of court time. most get the judgment and then do not follow up unless it is a large amount. The biggest problem is credit ratings are used for much more today, rent an apartment, get a job, open a checking account, there is just so much you can't do anymore. Go talk to 66788 at his office and get your shtt together.