The term â€˜junk debtâ€™ refers to any old debt that a person has and, for debt collecting companies, the name belies the fact that junk debt can be very profitable.Â Collection agencies buy these old debts, often that a person no longer legally owes, for literally pennies on the dollar and then can start going after the person who owes them to try and collect payment.Â This often starts with a simple phone call but can turn into harassment and sometimes illegal action that violates the debt holderâ€™s rights.
If youâ€™re in this situation here are a few facts and helpful tips to put a stop to the pestering.
First and foremost never acknowledge that the debt is yours. This can negate any legal rights that you have and open the door to the collection agency being able to legally collect the debt.Â No matter if you know the debt is yours or not do not say anything that would indicate it is and certainly never sign anything or agree to make any kind of payment.
The collection agency must prove that the debt is yours in writing.Â If they canâ€™t do that with a credit agreement, an account history or something similar then they canâ€™t legally collect the debt. You have the right to see any evidence that they have that the debt is your and, until they come up with it, they canâ€™t do anything.
Write the collection agency a letter saying that you do not acknowledge the debt and that you want to see proof in writing.Â They usually have a 30 day window after receipt of your letter to provide said proof so make sure you always send anything to them using certified mail.
On the same note, if you have proof that the statute of limitations has expired (more below) on the debt send a letter stating as much and demand that they stop harassing you.Â You can do this if you have declared bankruptcy also by sending them your discharge order.Â Having the certified mail receipts will be vital of you are still taken to court.
Every state has a different set of rules for the statute of limitation to collect a debt. It is vital that you know what the rules are in your state as many times the debt you owe will have passed this specific time, meaning that you no longer owe the debt and a collection agency must stop harassing you to get it. Knowing the rules in your state is important because many factors can change the legal statute status.
Finally, don’t fall for any collection agency â€˜trapsâ€™ like re-aging the debt by reporting old debt as if itâ€™s new and credit card offers where they tack the debt onto the balance of the card.