5 Debt Myths Debunked
When you are dealing with debt and debt collectors it can already be a very stressful time in your life. It gets more stressful when debt myths end up hurting your situation or adding anxiety because of common misconceptions. Luckily there are some debt myths that you can debunk so that you know how to handle your situation better!
Myth #1: Ignoring Debt Means It Will Go Away
While people in tough situations may hope that this is true, unfortunately, that is not the case. If you ignore debt collection agencies long enough then they may stop reaching out, but you will still be responsible for the debt that you owe. Even if it goes off your traditional credit report (usually after seven years) then it can still be in your creditor’s records. So that means if you would like to go back to the same company that you have debt with, then that debt will need to be resolved.
Myth #2: Debt Collectors Are Accurate All the Time
When a debt collector calls you, you should not automatically assume that it is an accurate debt that they are calling about. Sometimes debt collectors may receive inaccurate information. You also may come across fraudulent debt collectors that try to get people to pay on fake or resolved debts. Luckily, there is a debt validation process that you can request from collectors in order to prove that you actually have debt. You should do this no matter what!
Myth #3: You Can Cancel Your Debt with a Cease and Desist Letter
Many people believe that if you serve a cease and desist letter to a collection agency that your debt will be resolved. That is not the case. In fact, you still have the debt, but the debt collection agency can no longer reach out to you. If your debt is assigned to a new collection agency, then the cease and desist letter that you served will not be applicable anymore.
Myth #4: Debt Collectors Cannot Sue You After the Statute of Limitations
Even though the statute of limitation is the timeframe that debt collectors cannot sue you, some find ways around that. Debt collectors that are not reputable will re-age the debt or even still sue if you cannot prove that the statute of limitations has passed. They may even hope that you don’t respond to the lawsuit even if it is past the statute of limitations so that they can win in a default judgement. This is why it is extremely important to have proper documentation for the entire debt collection process.
Myth #5: Debt Collectors Can Have You Sent to Prison
Debt collection agencies will use scare tactics in hopes to get the person to repay on their debt. However, they legally cannot do this. They are not even allowed to threaten to have you arrested because they know that they do not have the authority to arrest anyone. However, it is important to know that depending on the state that you live in, you do run the risk of being arrested on specific types of debt that are unpaid like child support or failure to show up to court for a debt related case.