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the ireland
Joined: 11 May 2008
Location: korea
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 Posted: Wed Mar 30, 2011 9:33 am Post subject: |
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| Illysook wrote: |
| No, they can't keep reporting. They can keep trying to collect, but they can't keep reporting...unless you make a payment. Then the process can begin all over again. If you don't mind 7 years of bad credit, you don't have to pay those rotten creditors. It's not very honorable, but it can be done...until our government reinvents poorhouses or something. |
isn't that just theft? It probably wouldn't be so bad if you paid the money you borrowed, minus the interest, but to pay nothing at all?? |
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silkhighway
Joined: 24 Oct 2010
Location: Canada
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| Posted: Wed Mar 30, 2011 9:47 am Post subject: |
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| bucheon bum wrote: |
| silkhighway wrote: |
| Illysook wrote: |
| No, they can't keep reporting. They can keep trying to collect, but they can't keep reporting...unless you make a payment. Then the process can begin all over again. If you don't mind 7 years of bad credit, you don't have to pay those rotten creditors. It's not very honorable, but it can be done...until our government reinvents poorhouses or something. |
I actually went to look this up and ended up spending the last 2 hours reading about it and have learned...very little haha.
There doesn't seem to be easy to find consistent information on the web and in any case it's different based on jurisidictions.
From what I found:
Different types of credit and different institutions have different rules about how accurately and frequently they must report financial transactions, with credit card and financal companies having the strictest. Late payments on debts like credit cards and unsecured loans are marked 30,60,90, and then 120days default. After 120 days default, the company can then mark it is as collections/chargeoff, which allows them to write off the debt and sell it to a collections agency. I think there is a slight difference between collections and charge-off, but I never could figure out how that impacted the debtor.
Anyways, the chargeoff stays on your credit reports for 6-10 years depending on where you live and is counted from when your first payment was deliquent. There's also a statute of limitations for how long the creditor has to sue you, typically 3-10 years. Making payments on a chargeoff does not extend how long it will remain on your credit report, but it may extend the statute of limitations depending on where you live or accrued the debt. ONce you have a chargeoff on your credit report the damage is done to your credit score even if you pay the chargeoff, but if you pay the debt or agree to pay a reduced amount, it will be marked "paid", or "settled" which is better than an unsettled chargeoff.
An unpaid debt is an unpaid debt regardless of how much time passed, and and even if they creditors cannot legally sue you for the debt, they can continue you try to get you to pay it until you are discharged from a bankruptcy. |
yes, they have to write off the debt and sell it off to a collection agency. From that point forward it is 7 years. That's the gist of it basically.
If you plan to be in Korea for awhile and/or do not need a consumer loan for that number of years, I guess it wouldn't be that bad of a move, but it would definitely limit your options for awhile. |
The downside is that when you do return you better have people you can rely on to support you or be prepared to deal in cash only for at least 2 years or so while you build new credit. If your debt is any substantial amount and the creditors believe you are capable of paying it, they also have the right to sue you, and if they're successful, they can collect the money in other ways like by garnishing your wages. Court orders last longer than 7 years too. (I think it's about 15 in most places.)
| the ireland wrote: |
isn't that just theft? It probably wouldn't be so bad if you paid the money you borrowed, minus the interest, but to pay nothing at all?? |
Maybe it's moral theft, but it takes two to tango in a debtor-creditor relationship. Creditors shouldn't lend what they can't afford to lose and debtors shouldn't borrow what they can't afford to pay back.
Last edited by silkhighway on Wed Mar 30, 2011 9:56 am; edited 1 time in total |
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the ireland
Joined: 11 May 2008
Location: korea
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| Posted: Wed Mar 30, 2011 9:56 am Post subject: |
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| silkhighway wrote: |
| the ireland wrote: |
| Illysook wrote: |
| No, they can't keep reporting. They can keep trying to collect, but they can't keep reporting...unless you make a payment. Then the process can begin all over again. If you don't mind 7 years of bad credit, you don't have to pay those rotten creditors. It's not very honorable, but it can be done...until our government reinvents poorhouses or something. |
isn't that just theft? It probably wouldn't be so bad if you paid the money you borrowed, minus the interest, but to pay nothing at all?? |
Maybe it's moral theft, but it takes two to tango in a debtor-creditor relationship. Creditors shouldn't lend what they can't afford to lose and debtors shouldn't borrow what they can't afford to pay back. |
I'm not a fan of banks / bankers in the least. Being from Ireland, I trust them about as much as I trust our politicians. I just think it's a terrible attitude for someone to have. If I can't afford something, I'd do without, I wouldn't take out a loan knowing I couldn't afford to pay it back. Most people working here are earning enough money to make payments on their debts. |
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silkhighway
Joined: 24 Oct 2010
Location: Canada
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| Posted: Wed Mar 30, 2011 10:10 am Post subject: |
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| the ireland wrote: |
| silkhighway wrote: |
| the ireland wrote: |
| Illysook wrote: |
| No, they can't keep reporting. They can keep trying to collect, but they can't keep reporting...unless you make a payment. Then the process can begin all over again. If you don't mind 7 years of bad credit, you don't have to pay those rotten creditors. It's not very honorable, but it can be done...until our government reinvents poorhouses or something. |
isn't that just theft? It probably wouldn't be so bad if you paid the money you borrowed, minus the interest, but to pay nothing at all?? |
Maybe it's moral theft, but it takes two to tango in a debtor-creditor relationship. Creditors shouldn't lend what they can't afford to lose and debtors shouldn't borrow what they can't afford to pay back. |
I'm not a fan of banks / bankers in the least. Being from Ireland, I trust them about as much as I trust our politicians. I just think it's a terrible attitude for someone to have. If I can't afford something, I'd do without, I wouldn't take out a loan knowing I couldn't afford to pay it back. Most people working here are earning enough money to make payments on their debts. |
Personally I don't find arguing about what an individual person or organization "shouldn't" or "shouldn't do" very useful and talking about debit-credit problems is a macro-issue. Having stricter default regulations would mean a lot of people in genuine financial trouble get caught in an financial trap. As a society, is it better to have people fulfil their moral obligation or is better to allow people a fresh start and to move on? There's no one right answer there, and there are trade-offs. Equally, do we mandate stricter lending regulations and cap interest rates banks and credit card companies are allowed to charge? Banks then become more careful to whom and how much they're willing to lend meaning less loan defaults, but then that also means less liquidity in the market and less growth. Again, a trade-off.
Last edited by silkhighway on Wed Mar 30, 2011 10:11 am; edited 1 time in total |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Wed Mar 30, 2011 10:10 am Post subject: |
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Banks lend something they don't have and charge interest. There is nor moral obligation to participate in an immoral system.
http://www.debtdeflation.com/blogs/2009/01/31/therovingcavaliersofcredit/
Best, don't borrow. If you have borrowed then you should work aggressively to get out of it. That's what rich people do. |
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Madigan
Joined: 15 Oct 2010
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| Posted: Wed Mar 30, 2011 10:18 am Post subject: |
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| silkhighway wrote: |
| the ireland wrote: |
isn't that just theft? It probably wouldn't be so bad if you paid the money you borrowed, minus the interest, but to pay nothing at all?? |
Maybe it's moral theft, but it takes two to tango in a debtor-creditor relationship. Creditors shouldn't lend what they can't afford to lose and debtors shouldn't borrow what they can't afford to pay back. |
This reminds me of a maxim that has been getting thrown around lately. To wit: "If you owe the bank $100, that is your problem. If you owe the bank $1-million, then that is the bank's problem." Prudence is needed on both sides of the transaction or agreement. But the best idea is just to stay out of debt entirely. I have one credit card with a $2500 limit, but it gets paid off every month. No other loans. It all works out for me. Less stress, less headaches. |
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allovertheplace
Joined: 02 Aug 2009
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| Posted: Wed Mar 30, 2011 3:37 pm Post subject: |
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| the ireland wrote: |
| Illysook wrote: |
| No, they can't keep reporting. They can keep trying to collect, but they can't keep reporting...unless you make a payment. Then the process can begin all over again. If you don't mind 7 years of bad credit, you don't have to pay those rotten creditors. It's not very honorable, but it can be done...until our government reinvents poorhouses or something. |
isn't that just theft? It probably wouldn't be so bad if you paid the money you borrowed, minus the interest, but to pay nothing at all?? |
The problem with this idea is that lending practices were deemed predatory and thus illegal. Just nobody wants to stand up and say it isnt moral or legal. Yes, I understand its my obligation to pay what I borrowed plus interest. However, for a company to triple the interest rate for a 3 day late payment is morally wrong, but fiscally legal. These practices are changing however... |
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sadguy
Joined: 13 Feb 2011
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| Posted: Wed Mar 30, 2011 6:43 pm Post subject: |
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are you guys saying if you don't pay your credit card debt for 7 years, the credit card company has to sell of that debt to a collector? and then what happens. you still owe money, but just not with the bad credit score?
i lost my credit card in hong kong 2 years ago and closed the account. i tried to pay off the card as i usually did online, but after the closed the card, i couldn't log in. i haven't heard from them since. what do u think i should do? |
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Zyzyfer
Joined: 29 Jan 2003
Location: who, what, where, when, why, how?
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| Posted: Wed Mar 30, 2011 10:59 pm Post subject: |
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| i lost my credit card in hong kong 2 years ago and closed the account. i tried to pay off the card as i usually did online, but after the closed the card, i couldn't log in. i haven't heard from them since. what do u think i should do? |
Just because you don't hear from them doesn't mean nothing happened. Have you been filing taxes over here? I've been lazy about it but filed a few years back for the first time. A very old bill I wasn't aware even existed which had been sent to a collection agency that red-flagged me and went to town with the threats. In order to spare my credit record, I ended up paying the massively inflated bill. Maybe you're lucky, or maybe the bank sent mail to your last known address on file, never got a response, and fired it off to a collection agency that is just waiting for some official activity from you.
And a collection agency getting a bill is even worse news, at least in the US. It all shows up on your credit record and all negatively impacts your score. |
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silkhighway
Joined: 24 Oct 2010
Location: Canada
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| Posted: Thu Mar 31, 2011 6:33 am Post subject: |
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| Zyzyfer wrote: |
| Quote: |
| i lost my credit card in hong kong 2 years ago and closed the account. i tried to pay off the card as i usually did online, but after the closed the card, i couldn't log in. i haven't heard from them since. what do u think i should do? |
Just because you don't hear from them doesn't mean nothing happened. Have you been filing taxes over here? I've been lazy about it but filed a few years back for the first time. A very old bill I wasn't aware even existed which had been sent to a collection agency that red-flagged me and went to town with the threats. In order to spare my credit record, I ended up paying the massively inflated bill. Maybe you're lucky, or maybe the bank sent mail to your last known address on file, never got a response, and fired it off to a collection agency that is just waiting for some official activity from you.
And a collection agency getting a bill is even worse news, at least in the US. It all shows up on your credit record and all negatively impacts your score. |
It's a good idea to check your credit history about once a year because they can and do make a lot of mistakes, especially if you have a common name. Well maybe not once a year when you're in Korea, but a check of your credit history before you return home could prevent a rejection surprise when you find out you can't rent an apartment or get turned away from a job because you have an outstanding $20 power bill you never knew about from some student flat you were in 5 years ago.
Sadguy, if you do owe money, your credit report will have the contact info of whoever owns your debt as well. If you only owed a small amount, say less than $100, you may have gotten lucky and they may have just wrote it off. That's not uncommon. So if I were you, I'd start by getting a copy of my credit report from the major credit reporting companies (Equifax, Trans-Union, and there's one more in the States..not sure which one.)
Also, if you do owe money to a collections agency, make sure you get everything *in writing* before you pay and keep a paper trail. They're scum of the earth outfits, so know your rights before dealing with them. In Canada for example, I'm pretty sure they're not allowed to charge interest or extra fees on top of the debt but they still may try. Another tactic they use is to "settle" your debt by offering you a discount, but then sell the remaining portion of your debt to another collections company. |
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sadguy
Joined: 13 Feb 2011
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| Posted: Thu Mar 31, 2011 6:58 am Post subject: |
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| damn. thanks for the heads up. |
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Kuros
Joined: 27 Apr 2004
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| Posted: Thu Mar 31, 2011 7:54 am Post subject: |
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@silkhighway
Excellent advice.
I wouldn't even pay a collections agency. They bought the bad debt at a cheap price (15%-35% of value) and subsist on pure fear tactics. Your credit will be shot either way, so best to save the money so you can pay for necessities up front. |
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pangaea
Joined: 20 Dec 2007
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| Posted: Thu Mar 31, 2011 8:19 am Post subject: |
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| Keep in mind that if you don't pay your bills, your creditors will use any legal means necessary to find you. That means calling your family, friends, neighbors, associates, and past and present jobs to try to find you. Just because you don't pay, doesn't mean that the companies you owe pay people to sit around and cry about it. They have people they pay to try to find you. Yeah, it sucks to have debt. It also sucks to have a creditor call everyone you know. Maybe some of you wouldn't be embarrassed by this. Personally, I would rather make some sacrifices to pay off my debt and take it as a lesson learned to not go into unnecessary debt. |
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davai!
Joined: 04 Dec 2005
Location: Kuwait
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| Posted: Thu Mar 31, 2011 8:20 am Post subject: |
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A few statistics for the US:
Negative information can stay on your credit report for up to 84 months and NO LONGER.
If you "do the right thing" and pay off a 5-6 year old debt, the 84 month clock starts ticking again.
It goes state by state, but there is a statute of limitations for the banks to sue you for the debt. For example, if you live in California, after 4 years, the bank has no recourse. In practice, banks rarely took debtors to court, but recently have done so.
IF THE BANK CAN PROVE YOU WERE OUT OF STATE DURING THIS TIME, THEY CAN REQUEST THAT THE TIME LIMIT BE EXTENDED.
You will still owe the debt, and they can ask you for it, even call you. BUT
Under the Fair Debt Collection Practices Act, you can write to them and tell them to contact you only by mail. They will stop calling, as the penalty for them is $1000 (minimum) PER EVENT (phonecall).
Collection Agencies often buy debt for $.08 on the Dollar. If you have been "charged off" like this, you will get a w2 form and you must report the charged off amount as income. This can happen within the first year of your delinquency.
You can get a free credit REPORT (not score) from each of the three Credit reporting bureaus (Experian, TransUnion, Equifax) in the US by going on www.annualcreditreport.com. You will need to proxify if doing it outside the US.
You can challenge ANY item on your credit report for ANY reason. The bureau will send a letter to the creditor and if there is no response within 30 days, that item gets deleted. Internet forums suggest to send a paper request to avoid the electronic clearinghouse
If it gets deleted, you still OWE the debt, it just can never again be reported.
Unsecured debts have no collateral. The bank CAN NOT have your wages attached, nor can they go after a family member or friend, unless they co-signed the debt.
Student loans are a whole different ballgame..... |
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Kuros
Joined: 27 Apr 2004
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| Posted: Thu Mar 31, 2011 8:58 am Post subject: |
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| pangaea wrote: |
| Keep in mind that if you don't pay your bills, your creditors will use any legal means necessary to find you. That means calling your family, friends, neighbors, associates, and past and present jobs to try to find you. Just because you don't pay, doesn't mean that the companies you owe pay people to sit around and cry about it. They have people they pay to try to find you. Yeah, it sucks to have debt. It also sucks to have a creditor call everyone you know. Maybe some of you wouldn't be embarrassed by this. Personally, I would rather make some sacrifices to pay off my debt and take it as a lesson learned to not go into unnecessary debt. |
This is wrong. Here is a link to the Fair Debt Collection Practices Act.
Look at 805(b). Collections agency communications with third-parties are expressly forbidden. In fact, if you hire a lawyer, the collections agency has to speak with your lawyer. |
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