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