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Some creditor harassment is all smoke and mirrors

Some Massachusetts residents may unfortunately be receiving letters from debt collectors demanding repayment of credit card debts or other expenses. While this can be disconcerting and even a little scary, those who receive these letters, especially when they pertain to old credit card bills, may want to think twice before responding to the creditor harassment or before making a good faith minimum payment on the debt. Although nothing stops a collector from asking a person to pay, aged credit card bills may not be collectible in a court of law.

In most states, laws prevent collectors from suing on an old credit card debt after a certain period of time, provided that the debtor has stopped making payments altogether. Moreover, a bad credit card debt can only remain on a debtor's credit report for seven years.

Nevertheless, credit card companies will oftentimes sell these debts to debt collectors at a steep discount. While the debt collectors realize that they cannot enforce the old debt, they nonetheless try to get a person to make voluntary payments. Once a person volunteers to make even one payment, the debt becomes fully enforceable again.

Aside from filing a bankruptcy, the best way for a debtor to stop a debt collector from harassing him or her about an old debt is simply to send a certified letter to the collector demanding that the contact stop. Under federal law, a debt collector can no longer contact a person once the collector receives that certified letter.

For those who perhaps have tried to work out an older debt by making voluntary payments but can now no longer afford to do so, a bankruptcy may also be a viable option. A Chapter 13 or Chapter 7 bankruptcy can not only stop collection on older debts but also can afford a debtor protection from more recent financial obligations.

Source: MSN Money "When debt repayment is optional," May 16, 2013

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