Reader’s Digest recently published an article detailing some secrets from the debt collector’s playbook (click here to read the full article).
As a Georgia bankruptcy attorney, I wanted to throw up when I read the part about how the debt collector will ask people to borrow from their 401k or borrow money from friends or family. Borrowing from a protected asset like a 401k to pay for a debt that can easily be eliminated in a Chapter 13 or a Chapter 7 bankruptcy is always a terrible idea.
Borrowing from friends and family creates tough situations when a bankruptcy case is filed. The bottom line is that you can’t favor your friends and family in a bankruptcy case over other creditors. As you can imagine, friends and family don’t react very well when I tell them that they have to be treated just like every other creditor in the case.
Reader’s Digest reports that top debt collectors receive monthly bonus checks of $10,000.00 or more. I”m surprised that collectors earn this type of money shaking people down.
Reader’s Digest also reports that most credit card accounts have a pre-approved reduction amount ranging between 15- 35 percent. Since most debt collectors buy the debts for less than 5 cents on the dollar, they make a huge profit even when they agree to reduce the face value of the debt by 35 percent.
The article advises that you always check the statute of limitations on creditcards.com before you ever agree to make any type of payment. In Georgia, the statute of limitations on credit card debt is six years. When you make a small payment, you might lose your protection from the statute of limitations by restarting the clock with a small payment. Take advantage of a free consultation with a local bankruptcy attorney if you are not sure.
Chapter 13 and Chapter 7 can end the nightmare of having to deal with debt collectors. Once you have a case number, it is illegal for a debt collector to call you or sue you. Get peace of mind today and call my office at 706-295-0030 to get the train to Peaceville moving.