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Collection, Charge-Off Accounts and Judgments
If I have older outstanding collection accounts and charge-off accounts, should I contact the collection agency in the hope that they did not place a lien on me or I have a judgment? And if I do have a lien, can I ask the collection agency or creditor that the lien has not been renewed?
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1 Reply
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Dealing with older collection efforts, charge-offs, and even potential garnishments needs some caution when approaching the situation.
Below is a coverage of what you ought to think of:
Collection Accounts and Charge-Offs Understanding
Collection Accounts: These are debts that a collection agency repossessed after the creditor tried to collect payment but was unsuccessful. They can hurt your credit score.
Charge-offs: This means that a lender has treated the borrower’s failure to pay the debts, in this case within 180 days, as a loss. Charge-off does not absolve liability for the debt, and lenders may attempt to collect the debt or sell it to a collection agency.
Reaching Out To The Collection Agency
Understanding Your State: It is prudent to check your credit report to determine the accounts in question before contacting a collection agency.
Inquiring About Liens: A collection agency can be contacted to confirm whether they have imposed a lien on you or a judgment exists. Knowing this before making any payments or entering into agreements is good.
Cash Judgments and Legit Liens – what’s the deal?
In this sense, judgments focus on the process where a creditor manages to sue you before a certain fee can be attached to your property. Nowadays, having a lien is not acceptable from a marketing point of view. However, it does stay on your credit report for seven years. If, in any unfortunate event, a creditor wins a lawsuit against you, that might create a lien on your assets because they could take a judgment.
Liens: If a lien exists, it tends to come in the way if you want to sell or refinance property in the future. With your name and details on the local courthouse, you could check records and determine if any states or liens exist against you.
Renewal of Liens is getting tricky and ugly.
Statute of Limitations: Depending on the jurisdiction, any liens attached to a settlement must be canceled after 5 to 10 years. As far as I know, most of them stay there, depending on whether the creditor or debt collector replaces them.
Negotiating: Agreements are easy to walk away from and get broken, especially with settlements or payment plans. But you know what? They should always be put in writing.
Before you pick up a phone
Impact on Credit: You should brush up on what might worsen your credit and what might benefit it, but consider the factors that can contribute to or deteriorate it while not ignoring the fact that some issues might resolve positively. For example, a worsening might be due to the collection recording of the event and the contact you afterward.
Payment Plans: To avoid having problems understanding the terms and conditions of a payment agreement, read through every detail before concluding. Suppose one proceeds with an agreement for payments. In that case, I will ensure that a renewed judgment or lien is impossible because whatever resists achieving that resists achieving the payments.
Some people must open their mail and pay attention to the collection agency letters. But I’d advise many people to contact the agency, as it is a great means of clarifying outstanding debts together with any possible liens or judgments against a person. Communication would help the agency and the sharer better appreciate any potential impact or cover the issues regarding debts through records. Lastly, if you have more questions, you can always ask me!