Be aware that collection agencies might call you about debt that you might have forgotten about, some of it may be even as old as 20 years. The collection agencies buy the “out of statute” debt for pennies on the dollar from credit card issuers, stores, cell phone companies, and other companies. In fact, these stores have already discharged the debt and it no longer appears on their books. If the debt is “out of statute”, this means that the states have set limits on how long a creditor or collection agency can sue to get their money back. The statutes vary from state to state and can be anywhere from three to ten years. (Check out BankRate to find your state’s statute.) You are legally not obligated to pay these debts once the statute runs out.
So why then would a collection agency buy these? Well, once you agree to pay them any money, it is profit to the collection agency. Also, you have just reset the statute of limitations and allowed the creditor to sue you. You are resurrecting old debt. This can cause you to have your credit trashed or even your wages garnished.
Another crafty idea that collection agencies have come up with is to partner up with a bank and offer credit cards to people with troubled credit histories. If you accept the credit card, you might not realize that you have also agreed to pay the old debt that you had and it is now tacked on to the balance of this new card. These deceptive practices are increasing. Don’t fall victim to it. If you are contacted, write them a letter and tell them to stop contacting you. You can also file a compliant with the FTC. Don’t forget to monitor your credit report. Remember you can obtain a free copy of your report each year.
However, as a Christian you need to remember that God admonishes us to pay our debts.
Romans 13:7 ESV
Pay to all what is owed to them: taxes to whom taxes are owed, revenue to whom revenue is owed, respect to whom respect is owed, honor to whom honor is owed.
Psalm 37:21 ESV
The wicked borrows but does not pay back, but the righteous is generous and gives;
Romans 13:8 ESV
Owe no one anything, except to love each other, for the one who loves another has fulfilled the law.
Romans 13:7-8 ESV
Pay to all what is owed to them: taxes to whom taxes are owed, revenue to whom revenue is owed, respect to whom respect is owed, honor to whom honor is owed. Owe no one anything, except to love each other, for the one who loves another has fulfilled the law.