Picture by TangoPango

Recently my husband checked his credit report. We were surprised at some of the things we found. Some of the things we found were:

1. a Federal Tax Lien from 1995 that had been paid off was still on there and supposedly had not been released;
2. a debt collection agency has put 4 debts on the report that are not my husband’s — they are from a business that he used to manage for someone else and are not his debts;
3. some of the information about where he used to live was wrong;
4. some of the information that was supposed to have dropped off years ago had not dropped off;
5. another debt collection agency had put a debt on his credit report that he did not owe and had never heard of before.

What are we going to do about this? I’m not really sure. He’s contacted the IRS but we don’t think that the right paper work was sent. We are going to research this some more. We’ll be sure to post about it as soon as we are finished with our research.

Have you checked your credit report lately?

Till next time,

JT Locke
Junk Debt 101

It’s a good idea to include the following in the letter.

1.  Tell me what the money you say I owe is for.

2.  Explain and show me how you calculated what you say I owe.

3.  Provide me copies of any papers that show I agreed to pay what you say I owe.

4.  Identify the original creditor.

5.  Prove the Statute of Limitations has not expired on this account.

6.  Show me that you are licensed to collect in my state.

7.  Provide me with your license numbers and Registered Agent.

8.  Provide a verification or copy of any judgment if applicable.

9. Cease and desist language requesting the debt collector only communicate with you via USPS.

By requesting this information, the debt collector must stop all collection activity for a period of 30 days. You will also receive the information needed to validate whether you owe the debt or not.

Till next time,

JT Locke
Junk Debt 101

There are some basic facts that you should know if you are thinking about taking out a payday loan.

1.  A payday loan is a short-term loan. Repayment periods range anywhere from 7 days to 40 days.  The term depends on the date of your payday.

2.  You may be required to post date a check for the amount of the loan plus fees. On the day the loan is due, the lender can and will run the check through the bank.  You will incur overdraft charges and fees if you do not have the money in the bank to cover the check.

3.  You may be able to borrow between $100 – $1,000. This depends on your state’s regulations.

4.    The APR (Annual Percentage Rate) of the loan may be 400% or more. They do not carry a low interest rate like conventional lenders.

5.    The shorter the term is for the loan the higher the APR.

6.  You are legally bound to repay the loan. If you do not have the money to repay the loan at the time the loan is due, refinancing is always an option.  This creates what is called the “debt trap”.  We’ll talk more about that later.

These are just a few facts about payday loans.  In future posts, we will discuss payday loans in more detail.  If you are considering taking out a payday loan, you may want to do more research to make sure you know all that you need to know to keep you out of the “debt trap” that can be created by payday loans.

Till next time,

JT Locke

Junk Debt 101

Junk Yard Treasures

Have you ever got a telephone call right before 9 p.m. at night from a debt collector trying to talk to you about a debt that is over 10 years old? It’s a typical tactic that “junk debt” collectors use. They call at all hours of the day to try and get you upset so that you will admit that the debt that they are calling about is yours. When you admit that the debt is yours, you start the statute of limitations on the debt running again. You may be saying to yourself, “Junk debt? I don’t understand what junk debt is or what a junk debt collector is.”

Junk debt is simply bad debt that has passed the statute of limitations that is set for each state on debt collection. It can also be a debt that has already been settled and has been resold to a junk debt collector to try and collect on the rest of the debt.

A junk debt collector is someone who has bought this bad debt for pennies on the dollar and they are now trying to collect on it. They try to re-age the debt. This means they try to get you to admit that the debt is yours so that the debt is made current again. Once you admit that a bad debt is yours, the time clock on the statute of limitations starts again and the debt becomes current and can be placed on your credit report.   Junk debt collectors also skirt the rules that have been set by the FDCPA (Fair Debt Collections Practices Act) about their conduct and what they can and cannot do.

Till next time,

JT Locke
Junk Debt 101

Many people confuse the term “credit” with the word “debt”.  They are not one in the same thing.

Credit is the amount of financing that is available to you.  It does not become a “debt” until you actually use the financing.  An example would be — you have a credit card that has a $1,000 credit line.  You haven’t used the card yet and do not owe $1,000 to the credit card company.  When you use the credit card — let’s say you splurge on supper and use $200 of the credit line — then this becomes a debt.  It is money that is owed to the credit card company.

Till next time,

JT Locke
JunkDebt101

The Meaning of Debt

According to Webster’s Online Dictionary, the meaning is very simple.  It simply means “something owed” or “a state of owing.”

According to the Fair Debt Collection Practices Act, debt goes into a little more detail than Webster’s definition.  The Fair Debt Collection Practices Act says that

The term “debt ” means any obligation or alleged obligation of a consumer to pay money arising out of a transaction in which the money, property, insurance or services which are the subject of the transaction are primarily for personal, family, or household purposes, whether or not such obligation has been reduced to judgment.

This makes everything a lot clearer, right?

Simply put — debt is an obligation. Debt is not necessarily always money.  It can be a service that you owe someone.  It can be an object or a goods or service promised in exchange for something.  The something that is promised could be money or it could be working for someone for a day or a week.

Examples of Debt

Someone pays you in advance for your car stereo that is still in your car.  You are in debt to the person until you have the car stereo taken out of the car and give it to them.

Another example — You do work for someone and they promise to pay you in a week.  The other person is in debt to you until he or she pays you for your work.

One more example — you take your car into the mechanic and promise to pay him by Friday.  You are in debt to the mechanic until you pay him.

Are debt and credit the same thing?

Check back for our next post for the answer!!!

Till next time,

JT Locke

Junk Debt 101

Junk Debt 101 was an idea born when my husband started receiving calls from “scavenger debt collectors.”  They were calling about a debt that was supposedly his debt and it was over 23 years old.  They never sent a letter regarding this debt.  They had just been calling and calling.  At the end they were calling and hanging up.  They were just letting the telephone ring and ring.  Finally, we wrote a letter and sent it certified and regular mail to them invoking our rights under the Fair Debt Collection Practices Act.  We are now waiting to see what’s going to happen.

After doing a lot of research, I found a lot of websites and several blogs on the subject.  Some were really good.  Some were written from the technical point of view.  Some contained a lot of misinformation.  Some were attorney blogs.  So I decided to start this blog and hopefully pull all the good information together and share some of our experiences with this “scavenger debt collector.”

There probably won’t be daily posts.  I do hope to get some guest hosting.  I hope that you find some of this information helpful.  I will be setting the blog up for RSS so that you can sign up and get updates as soon as they are available.

Till next time,

JT Locke

Junk Debt 101