Why Even Full-Time Workers Struggle With Expenses

Unemployment is low, inflation is historically low and even wages are perking up, leading many observers to believe the U.S. economy is humming along nicely. So why do many Americans say they are struggling?
A new book born of meticulous, years-long research offers a fresh insight into this burning question. Month-to-month swings in income, even for those with full-time jobs, are often the cause of Americans” financial anxiety, claim the authors of “The Financial Diaries: How Americans Cope in a World of Uncertainty.”
For a stunning number of American households, both income and expenses swing 25% or more in either direction on a regular basis, leaving many families scrambling on a month-to-month basis, even if things don’t look so bad annually, the authors argue in their book and a Harvard Business Reviews essay.
Economic data tends to examine broad movements; even at its most micro, it tends to identify years-long trends. Researchers Jonathan Morduch and Rachel Schneider had a sense government statistics were missing things, so they went nano. They spent 12 months getting 235 families to track every single dollar going in and out — 300,000 cash flow events in all. The product of their painstaking research offers perhaps the clearest view yet of why even middle-class Americans find themselves living with deep economic anxiety. The book even offers up a new term — “precarity,” or precarious economic volatility — to describe the plight of everyday Americans.
One of the more bold claims made in the book: Despite all the talk about income inequality, the authors say income instability has risen even faster and is the more immediate problem.
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What’s Income Instability? 
Many readers are familiar with the idea that unexpected expenses — like a health scare or major auto repair bill — can derail many households. But the book establishes another reality that might be new to many: income volatility, even among those with full-time jobs.
The book’s opening anecdote cites a research subject who works as a truck mechanic in Ohio. While he works full time, his pay relies largely on commissions and can vary from $1,800 to $3,400 each month. In bad weather, trucks break down more often. That means in the spring and fall months, mortgage payments aren’t made, and the electricity bill goes unpaid. Later, for a fee, the family catches up. (You can see how any missed loan payments may be affecting your credit scores by viewing your free credit report summary on Credit.com.)
This same problem is repeated again and again among the families studied. Morduch and Schneider found that the term “average income” is a bit of a farce, as typical families lived through five months each year with income that swings either 25% above or below “average.”
“This is creating a lot of anxiety and uncertainty that is impossible to see in the usual data,” Morduch said in an interview. About five months out of each year, incomes “weren’t even close” to average.
“Often we see the (financial) problems as a discipline problem, a failure of personal responsibility. What we’re trying to say is there’s something else going on,” he said. “The underlying conditions are really hard. It probably isn’t just about self-discipline.”
Income swings are to be expected among families suffering job loss, the self-employed or those who rely on tips, like waiters. But the researchers found a stunning rate of income volatility even among those with traditional-sounding full-time jobs.
“This was the single biggest surprise (in the research),” Morduch said. “There’s insecurity that’s because you are going to lose your job, but that’s not what’s driving anxiety for these folks … What we see is that when paychecks bounce from month to month, people can be making good financial choices but are still struggling.”
As a result, even earners who are safely in the middle class spent a month or two living as poor or “near poor,” the book says. The problem for many is better described as a lack of liquidity — getting enough cash to pay the mortgage this month — than as insolvency, or a hopeless difference between income and expenses.
“Not balancing on a high wire, driving on a rocky road,” the book says. “(There’s a) distinction between not having money at the right time vs. never having the money.”
While economists might just be becoming aware of this month-to-month struggle, the financial industry has known about it for some time. That’s one reason there are more payday lending storefronts in America than McDonald’s restaurants. (You can find tips for escaping payday loan debt here.)
Trouble Saving for a Rainy Day
The volatility problem is closely related to Americans’ lack of emergency savings. Study after study shows a large percentage of Americans don’t have the recommended three months of living expenses stored in short-term savings. Some studies show even more dire data. A stunning 46% of Americans told the Federal Reserve in 2015 they could not cover an emergency $400 expense without selling something or borrowing the money. Income and expense volatility, combined with no savings, is a perilous combination.
“Households don’t have a big cushion. Into this mix is the reality that levels of income have not risen – the bottom 50% has seen no income growth since 1980 — then you are really squeezed,” said Morduch. As a result, even in good months, earners don’t have any extra left over to build a rainy-day fund – economists say their budgets have no “slack.”
“There is a knock-on effect of diminished slack so when the budget gets hit by a car repair or the house needs a new roof, it’s just that much harder,” Murdoch said.
How did this income volatility come to pass? The authors blame what they call “the Great Job Shift.” Employers are increasingly sharing risk with their workers. That means cutting back hours, often on the spot, when times are slow. Or basing a large portion of pay on commission, as in the case of the truck mechanic. In other cases, workers rely on tipping to top-up wages that otherwise aren’t livable. In one of the book’s more frustrating scenes, as casino blackjack dealer in Mississippi describes how her income relies on events as whimsical as the nearby college football team schedule.
The subjects in the book are anonymized. Their names changes and a few other personally identifiable data points have been obscured, but otherwise, their financial diaries are disturbingly real.
How Do We Fix it? 
When asked for policy recommendations, Morduch leaps to the defense of the Consumer Financial Protection Bureau, which he says is working hard to regulate many of the short-term lending products that have emerged to services workers with volatile incomes. He says there’s also been constructive conversations with large firms about making hourly wage worker schedules more predictable, and moving away from so-called on-call workers. The “Schedules That Work Act” that would have promised some workers two-weeks scheduling notices was considered but tabled by Congress under President Barack Obama.
Other changes would help, too. Many social benefits programs are cumbersome to apply for and don’t offer much help for families who are only occasionally “near poor,” and might need help one or two months per year.
Changes that could encourage saving for short-term events would help, too. Tax-advantaged products like 401K accounts help families plan for decades in the future, but families living on the margins are afraid to use them for emergency savings because of the severe early withdrawal penalties. (You can learn more about withdrawing from your 401K here.) More flexible rules would encourage greater use of retirement accounts, Morduch believes.
“A lot of Americans wisely don’t want to lock up their money,” he said. “There isn’t enough attention paid to shorter-term policies.”
In a larger sense, Americans should probably change the way they think about income and spending, Morduch said, and many could learn from research subjects described in the book.
“The families we got to know, they think a lot about liquidity. They have a lot to tell other Americans. Mainly, prepare for a life of ups and downs,” he said.
If you’re looking for ways to keep your finances in check, we’ve got a full 50 ways you can curb and stay out of debt here. 
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The post Why Even Full-Time Workers Struggle With Expenses appeared first on Credit.com.
Source: Ramsey Debt Relief Feed 1

Creditor Gets a Judgment Against You — Now What?

It’s a scary prospect: a creditor securing a judgment against you — which is probably why we get so many reader questions about the issue. A judgment represents a legal obligation to pay a debt, meaning a creditor or collector sued you over an outstanding debt and won. But that court win isn’t necessarily written in stone. Judgments can be appealed, reversed, amended or, at the very least, settled for less, depending on the circumstances and what you do next. (First step: Consider visiting a consumer attorney. Some offer free consults —and many will represent you for free if they think a collector has broken the law.)
If you’re dealing with debt collectors and facing a judgment — or are already (perhaps unexpectedly) saddled with one — we’ve pulled together answers to all the major questions that may be on your mind and where you can go from there.
How Does a Creditor or Collector Get a Judgment Against You?
In order to get a judgment against you, the creditor or collector must take you to court. If you don’t respond to a summons, or if you lose, the court will issue a judgment in favor of the creditor or collector. The judgment will be filed with the court, and once that happens, it is public record. That means it will likely end up on your credit reports as a negative item. (You can check your credit for judgments by viewing your free credit report summary on Credit.com.)
How Are Judgments Collected?
One of the main reasons you want to try avoid getting a judgment against you is that creditors may have additional ways to collect once a judgment has been issued. As we mentioned earlier, depending on your state’s laws, they may include going after your bank accounts or other property, or trying to garnish your wages. But as the saying goes, “you can’t get blood from a stone.” As the National Consumer Law Center points out in its book, “Surviving Debt:”
Even if you lose a lawsuit, this does not mean you must repay the debt. If your family is in financial distress and cannot afford to repay its debts, a court judgment that you owe the money may not really change anything. If you do not have the money to pay, the court’s judgment that you owe the debt will not make payment anymore possible.
If you aren’t sure what a judgment creditor can do to collect from you, it’s a good idea to consult a bankruptcy attorney who can help you understand what may be at risk if you don’t pay. The attorney can explain what property you own is “exempt,” or safe from creditors. You can also check out this article on how to get out of debt.
Can a Judgment Be Reversed?
Yes. In certain circumstances, you can ask the court to re-open a judgment or you can formally file an appeal. t’s also possible to have the terms of a judgment altered. And, with a few exceptions, a judgment can be discharged in bankruptcy. However, laws (and the timelines for their implementation) vary by state, so, again, if a creditor secures a judgment against you, it can be in your best interest to consult a local consumer attorney. You can find more about your legal rights post-judgment here.
Can I Settle a Judgment?
The answer to this question is often “yes.” Most judgment creditors know it is often difficult to collect judgments, especially if the debtor doesn’t have wages that can be garnished or assets they can go after. If you are able to get a lump sum of money from, say a relative, you may be able to offer that to the creditor to pay off the judgment. Just make sure you get any agreement in writing before you pay. Make sure the agreement spells out all the terms of the settlement, including the fact that you will not owe any more money after you make the agreed upon payment.
Can I Avoid a Judgment?
Another option is to settle the debt before it goes to court. The creditor may be willing to settle for part or all of the money you owe. Of course that only works if you can manage to pull together money to pay them. If you can, make sure you have a written agreement from them that states they will not pursue the debt in court if you make the payment as agreed. Then check with the court to make sure the matter has been dropped.
How Long Can Judgments Appear on Credit Reports?
Unpaid, they can remain on your credit reports for seven years or the governing statute of limitations, whichever is longer. Once judgments are paid, they must be removed seven years after the date they were entered by the court. But soon those parameters are changing: Beginning in July, the credit bureaus will exclude judgments that don’t contain complete consumer details or have not been updated in the last 90 days. (Wondering how long other stuff stays on your credit report? We’ve got you covered here.)
How Long Can Judgments Be Collected?
There is a specific time period for collecting judgments, and it also varies by state. This “statute of limitations” is often 10-20 years long. In addition, in most states it can be renewed. For that reason alone, it’s best to try to avoid getting a judgment against you in the first place. And if it does happen, it’s best to try to resolve the debt.
Can Interest Accumulate on a Judgment?
Yes. In most states, interest may be charged on a judgment, either at any rate spelled out in state law, or at the rate described in the contract you signed with the creditor. In addition, the judgment may include court costs and attorney’s fees.
Anything Else I Should Know About Judgments?
A debt collector that threatens to get a judgment against you or to garnish your wages or seize your property may be making an illegal threat. Talk with a consumer law attorney to find out if that’s the case.
And just because you haven’t heard anything about a judgment in a while, that doesn’t mean you should assume it has gone away. It’s possible that the creditor could decide at a later time to try again to collect from you. Plus, an unpaid judgment may prevent you from buying a home or getting credit at a decent interest rate. So it’s a good idea to try to resolve the judgment, either by filing for bankruptcy or by paying off or settling the judgment when you are able to.
Remember, when dealing with debt collectors, it pays to know your rights. You learn more about them in our Managing Debt Learning Center.
Reminder: This post is meant as educational information, not legal advice. Please consult an attorney for legal advice.

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The post Creditor Gets a Judgment Against You — Now What? appeared first on Credit.com.
Source: Ramsey Debt Relief Feed 1

7 Things You Need to Know About the Statutes of Limitation for Debt

You may not know this, but, yes, debt does technically have an expiration date. It’s subject to a statutes of limitations, which limits how long a creditor or collector has to sue to recoup an unpaid balance. Statutes of limitations (SOL) vary by state and debt type. They’re usually between 3 to 6 years, but some longer windows do apply. Of course, you shouldn’t treat the SOL as a solution to your money woes. For starters, those expiration dates have nothing to do with how long a unpaid debt can appear on your credit report (that’s generally around 7 years — more here) and it’s possible for a court to award a judgment to a creditor on time-barred debt if you don’t show up to raise the issue. Plus, there are ways to unwittingly restart the SOL clock. Having said all that, if you have old unpaid debts, it can be helpful to know the statutes of limitation that applies to them. (You can check your credit for outstanding accounts by pulling your credit reports for free each year at AnnualCreditReport.com and viewing your free credit report summary on Credit.com.)
Here are the seven most common questions we’ve received from readers about the statutes of limitation for debt.
1. How Long Is the Statute of Limitation for my Debt?
The time period typically either starts when you fall behind on a debt, or from the date of your last payment, and the length of time depends on state law for that type of debt. This chart is a guide to state statutes of limitation. Unfortunately, it is not always clear-cut. So it’s a good idea to check with your state attorney general’s office, a consumer law attorney or legal aid, especially if you are being threatened with legal action.  
2. Can a Debt Collector Try to Collect After the SOL Has Expired? 
In many cases, yes. However if you tell the debt collector not to contact you again, they must stop. It’s a good idea to put your request in writing. Once they’ve received it, they can contact you only to confirm that they have received your request or to notify you of legal action they are taking to collect. In some states, however, trying to collect a time-barred debt is illegal and a creditor who attempts to do so is breaking the law. 
3. If the SOL Has Expired Can I Still Be Sued? 
It is not uncommon at all for consumers to be sued for time-barred debts. If you are sued for an old debt and the statute of limitation has expired, you can raise the expired statute of limitation as a defense against the lawsuit (here are some other debt collection defenses you can use, too). However, many consumers do not appear in court and therefore the creditor or collector gets a judgment against them. That is why you should not ignore a legal notice about a debt, even if you think the debt is too old. A consumer law attorney or bankruptcy attorney can help you figure out how to respond. 
4. Should I Pay an Old Debt? 
That’s something only you can decide. However, keep in mind that if you pay anything — even a small amount — on an old debt, you may restart the statute of limitation. That’s why it can be risky to pay an old debt if you can’t afford to pay it in full. You could open yourself up to collection efforts, or even a lawsuit, for the entire amount the collector says you owe. 
5. Can a Debt Still Appear on my Credit Reports After the SOL Has Expired? 
In many cases, the answer is yes. The length of time that negative information may be reported is governed by the federal Fair Credit Reporting Act. Most negative information can be reported for seven years. The statutes of limitation for most consumer debts, on the other hand, is four to six years. So you could have a situation, for example, where the statute of limitation expired on a debt in four years but the related collection account still appears on your credit reports for another three years after that. And, yes, collection accounts can do serious damage to your credit scores.
6. I Took Out a Debt in One State but Moved. Which State’s SOL Applies? 
That can be a difficult question to answer. Consumers can generally be sued in the state where they took out the loan or the state where they currently live. Sometimes the statute of limitation will be based on the laws of the state described in the contract (in the case of credit cards, that will be spelled out in the credit card agreement). 
When it’s not clear which state’s SOL applies, it is often up to the court to decide. In a number of court cases, the statute of limitation that was shortest was applied. But that’s not true in all cases. That’s why it is helpful, if you are being sued for a debt, to consult with a consumer law attorney who can help you understand whether the statute of limitation has likely expired.
7. What Is the SOL for Court Judgments? 
If a creditor or collector has obtained a court judgment there is often a separate statute of limitation that applies to judgments. (Tip: If you have unresolved debts, be sure to at least get your free annual credit reports, as we mentioned, to see if any judgments are listed.) In many states, that time period is 10 years or longer, and judgments may be renewed. Learn more about how about judgments work here.

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Dealing with debt? if you’ve got questions about how to best manage those burgeoning balances, ask away in the comments section below and one of our experts will try to get back to you. In the mean time, feel free to check out of Managing Debt Learning Center. 
This article has been updated. It originally ran on April 20, 2015.
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The post 7 Things You Need to Know About the Statutes of Limitation for Debt appeared first on Credit.com.
Source: Ramsey Debt Relief Feed 1

50 Things Anyone Dealing With a Debt Collector Should Know

Getting a debt collection call is never fun. Even in a best-case scenario — it’s your debt and you can pay — that outstanding account can cause a headache or two. And if the debt’s contentious, not yours or just too darn high, the situation can become (or at least feel) a lot more dire. But knowledge is a superpower when it comes to dealing with a debt collector in any shape or form.
Here are 50 things anyone who’s gotten a debt collection call should know.
1. You Have Rights
Yes, a debt collector has every right to collect on a debt you legitimately owe, but there are rules and restrictions — formally known as the Fair Debt Collection Practices Act (FDCPA) — that govern how they can go about their business.
2. Old Debts Expire
Each state also has laws specifying how long collectors have to sue you over a debt. In most states, these time limits last for four to six years after the last payment made on the account. You can consult this chart to determine your state’s statutes of limitations (SOL) — and if you get a call about a very old debt, you should really consult this chart, because …
3. Zombie Debts Are Real …
Collection accounts get resold all the time, and it’s not uncommon for someone to get a call about a debt that’s outside the SOL or no longer owed. The latter is illegal, but the former may not be: The SOL applies to how long a collector has to sue you over a debt, but, in many cases, they can still try to get you to pay.
4. … & You Can Wind Up Reanimating Them
If the old account is legit, you can unwittingly restart the clock on the SOL by paying part of the debt or even agreeing over the phone that it’s yours. If you get a call about a debt, be sure to get all the details before saying you owe. That due diligence is doubly important because …
5. There Are a Lot of Scammers Out There
That’s not to say you’re talking to one, but you’ll want to stay on guard. “Ask the caller for their name, company, street address, telephone number and if your state licenses debt collectors, a professional license number,” writes the Consumer Financial Protection Bureau (CFPB), which has more tips for spotting a debt-collection scam on its website.
6. You’re Entitled to Written Verification
In fact, FDCPA requires a collector to send a statement outlining the specifics of the debt within five days of contacting you. That notice — which is basically step one in determining whether a debt’s legit — must include the amount of money you owe, the name of the original creditor and what actions to take if you believe the information is wrong.
7. You Can Dispute the Debt
Debt collectors must investigate a debt so long as you file a dispute in writing within 30 days of their initial contact — and they’re to cease contact until they verify (again in writing) that you owe the amount in question.
8. Collectors Can’t Just Inflate What You Owe
Regarding that amount: A debt collector can charge interest, but only up to the amount stipulated in your contract with the original creditor. Most states also cap the amount of interest and fees a debt collector can charge.
9. You Can Ask Them to Stop Calling 
Per FDCPA, a collector must cease contact if you send a letter requesting they do so. That letter won’t absolve you of a legitimate debt, but it can curb incessant and heated phones calls, which is important because …
10. Too Many Calls Are Illegal
Another facet of FDCPA: Collectors can’t call you too early in the morning (before 8 a.m.), too late at night (after 9 p.m.), too many times a day or at work once you tell them not to. They’re also not allowed to use abusive language — no cuss words or name-calling.
11. Collectors Can Contact Friends & Family 
But only to locate you. They can’t identify themselves as a debt collector, and there are limits on the number of times they can contact a third party.
12. You Can’t Inherit a Debt
Speaking of family, you can’t inherit a loved one’s debt after they die — unless, of course, you cosigned on the loan in question. Debts owed by the deceased are generally paid out of their estate, not by friends or family, so don’t panic if you’re an executor. You can learn more about dealing with a loved one’s debt after death here.
13. Ignoring a Debt Can Have Big Consequences
It can be tempting to cut off communication with debt collectors, particularly if they’re stepping out of line. But doing so won’t make that debt go away. And a debt collection account can just lead to a whole lot of phone calls. For one …
14. That Account Can Appear on Your Credit Report …
Debt collectors can report outstanding accounts to the consumer credit bureaus. You can check for one by pulling your free annual credit reports or viewing your free credit report summary on Credit.com.
15. … But Only if They’re Accurate
You can dispute an erroneous debt collection account or an error on a legitimate one, like an inaccurate balance or payment status, with the credit bureaus.
16. Resale of the Debt Won’t Restart the Reporting Clock
If your debt changes hands, as collection accounts often do, that sale does not restart the seven-year credit reporting window. If the new collector re-ages the account, you can dispute the date with the credit bureaus. And if the same account is being reported by multiple collection agencies, that’s a violation of the Fair Credit Reporting Act (FCRA), and you can dispute the accounts listed by the agencies that no longer own the debt, too.
17. You’ll Soon Get Extra Time to Settle Medical Debts
Thanks to a settlement brokered by state attorney generals back in 2015, the credit bureaus will soon wait 180 days from the time a medical debt was first reported before adding it to your credit file, giving you more time to address bills with your insurance and health care providers. (The settlement gave the bureaus a little over three years to implement these changes.)
18. Not All Collectors Report Right Away
Some collectors will hold off on notifying the bureaus so they can use credit reporting as leverage to get you to pay. This practice is important to note, because it means …
19. You Can Owe a Debt That’s Not on Your Credit Report
Checking your credit can help you verify a debt or track down a debt collector you’re looking to pay, but don’t take an account’s absence as absolute proof you don’t actually owe. The collector just may not have reported it to the bureaus yet.
20. Many Collectors Are Willing to Negotiate 
Collectors often buy debts for pennies on the dollar, so they don’t need to recoup the full amount to turn a profit — and yes, that means one may be willing to let you settle for less. You can find tips for negotiating with collectors (and creditors) here.
21. It’s Important to Get an Agreement in Writing
If your negotiation tactics work, be sure to get the terms the collector is agreeing to in writing — particularly if they involve skipping further adverse action against you.
Lexington Law Credit Repair:
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22. A Collection Account Will Hurt Your Credit Score …
If it hits your report, a single collection account can cause your credit score to drop 50 to 75 points or more. The better your score, the harder the fall.
23. … For Quite Some Time …
Collection accounts, paid or unpaid, can be reported to the credit bureaus for seven years, plus 180 days from the date the original account went delinquent, though its effect on your score will lessen over time. (We’ve got more on how long stuff stays on your credit report here.)
24. … Even if You Pay …
You read that right: Paying a collection account won’t guarantee removal from your credit reports. In fact, thanks to their contracts with the credit bureaus, most collection agencies will continue to report the account for that full seven-year timeframe — though there are signs that’s changing.
25. … But There Are Reasons to Settle
If the account is sticking around, make sure it’s at least (correctly) reported as paid. Paid collections carry less weight than unpaid ones, and some newer credit scoring models even ignore them entirely. Beyond that, settling a debt can stop a collector from taking further action against you. Don’t panic, though …
26. The Debt Itself Won’t Land You in Jail
You can’t be arrested just because you owe someone money, so if a debt collector keeps talking jail time, they’re seriously out of line.
27. No Threats Allowed
In fact, they’re illegal. FDCPA prohibits dire threats of arrest, violence or even a lawsuit if the collector doesn’t intend to file one. Having said that …
28. You Can Be Sued
So long as the statute of limitations in your state haven’t expired and you legitimately owe, though there’s no guarantee a collector won’t try to get a court ruling on a debt you’re contesting or otherwise unable to pay.
29. Small Payments Won’t You Spare You
A debt collector can still move to sue you for the outstanding balance so long as it’s legit and within the SOL. That’s why, as we mentioned earlier, it’s important to get a payment agreement in writing. A signed agreement not to sue could hold up in court, but even if you have one don’t ignore a court summons.
30. Skipping a Court Date Can Cost You
Failure to appear in court could result in a warrant for your arrest, which is why confusion persists as to whether an unpaid debt can land you in prison. It’s more likely your absence will net a default judgment for the collector, which can lead to garnishment.
31. Garnishment Lets a Collector Seize Funds …
Usually they’ll garnish your paycheck or levy your bank account. In most cases, however, the collector can’t do this without a court order. (The exceptions are back taxes, outstanding federal student loans and unpaid child support.)
32. There Are Limits to How Much They Can Take
Garnishment caps are established by federal law and state law, meaning they can vary, depending on where you live. Some states don’t allow garnishment on certain types of debt at all. You can consult a local consumer attorney or call your state Attorney General’s office to get an idea of the laws in your area.
33. Certain Assets Are Safe From Garnishment
Those assets include Social Security, disability and retirement accounts, though things get tricky once those funds hit your bank account, and there are exceptions here, too, that usually involve unpaid federal debts.
34. A Judgment Isn’t Always Final
In certain circumstances — say you weren’t properly served papers notifying you of the lawsuit — you can ask the court to re-open a judgment or formally file an appeal.
35. It Can Also Be Settled
Since it can be difficult to collect on a judgment, especially if your wages or assets can’t be garnished, a collector may be willing to accept a lump sum payment to put the debt to bed. Again, just make sure you get an agreement in writing before forking over any funds.
36. A Judgment Can Blemish Your Credit …
Technically, unpaid judgments can remain on your credit reports for seven years or the governing statute of limitations, whichever is longer. Once paid, a judgment must be removed seven years after the date it was entered by the court.
37.  … But It’s Getting Harder 
Starting July 1, the credit bureaus won’t list a judgment on your credit report unless it includes, at a minimum, your name, address, Social Security number and/or date of birth. Plus, judgments will be removed if public records aren’t checked for updates at least every 90 days.
38. Judgments Can Involve Interest
But, again, only at the rate specified in the contract you signed with the creditor. There are state-level caps and restrictions at play here as well.
39. Judgments Can Expire
The collector has a set time in which they can collect on a judgment. This SOL varies by state but is often 10 to 20 years long, and in most states it can be renewed. That’s why …
40. Judgments Are Best Avoided
It can be tempting to try to ride out your state’s SOL, but unless you’re very near or past that due date, it’s not really worth chancing a lawsuit, judgment and subsequent garnishment (with interest!), not to mention the big damage an unpaid account can do to your credit. If you do have a judgment against you, you may want to consider settling.
41. You Can Sue a Debt Collector …
Not simply as a means to get out of a debt you do owe, but if a collector is in clear violation of FDCPA, you can file a claim against them so long as it’s within one year of the date the law was violated. You’ll need proof that the collector broke the law, though, so it’s important to catalog your communications with a debt collector — even before things potentially take a turn for the worst.
42. … Even if They Have the Wrong Number
A collector shouldn’t be bothering you about a debt you don’t actually owe, so if they continue to harass you after you’ve made it clear you’re not the person they’re looking for, that’s grounds for a lawsuit.
43. Robocalls to Your Cell Are a Big No-No …  
Thanks to the Telephone Consumer Protection Act (TCPA), those are illegal. Per TCPA, companies, not just collection agencies, can’t call you on your cellphone using an automated telephone system or pre-recorded message without your consent. 
44. … Unless They’re on Behalf of Uncle Sam
One big exception to the rule: Debt collectors working on behalf of the federal government can autodial you, but they’re currently limited to three robocalls a month, unless you give them permission to call more.
45. Hiring a Lawyer May Not Cost You …
Attorneys specializing in debt collection cases typically offer a free consultation — and many will often represent you for free if they think a collector has broken the law. (They’ll collect their fees from the plaintiff.)
46. … & Should Cease Communications
In general, a debt collector can’t contact you if you tell them you have an attorney and that attorney is handling your debts.
47. You Can Report Rule-Breakers …
Debt collection agencies fall under the purview of the CFPB, so if you’re dealing with a debt collector who’s way over the FDCPA line, you can file a compliant with the bureau.
48. … & Scammers, Too
If they’re trying to scam you, there’s a good chance they’re trying to scam others, too. That’s why it’s important to file a complaint with the Federal Trade Commission and your state Attorney General’s office so they can investigate the callers.
49. Bankruptcy Is an Option
Collectors can’t try to recoup a debt discharged in bankruptcy, but that doesn’t mean you should rush to file. For starters, not all debts are dischargeable. Plus …
50. It’ll Wreck Your Credit
Bankruptcy is a major credit score killer. It can cause your score to drop as much as 200-plus points when it hits your file. And you’ll be stuck with the big, old blemish for quite some time. Some bankruptcies can stay on your credit for up to 10 years and can affect your ability to get a loan that entire time. If you’re considering bankruptcy, be sure to consult with a consumer attorney.
Remember, there are ways to keep a debt from going to collections. If you fall behind on your payments, contact your creditor immediately to see if you can work out a payment plan or refinance. And keep an eye on your mail: Sometimes bills, particularly medical debts, go to collections simply because you don’t know you owe.
Want to make sure you don’t go in the red? We’ve got 50 ways to stay out of debt right here. 
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