You may have junk debt. These are debts that the original creditor, for a variety of reasons, has been unable to collect. There are many steps that creditors take as they attempt to collect debt. Credit card companies will first call their late paying customers in house. They’ll then attempt to collect any late payments immediately, and will continue to try to turn delinquent customers into current payers. This process can take months, but eventually, if the lenders are unsuccessful in their attempts, they will turn the past due debt over to a collection agency. Some credit card companies actually own the collection agencies they first employ to collect past debt. Eventually, if money has not been collected, credit card companies will sell the debt to junk debt buyers.
Junk debt buyers pay for debt according to its age. Fresh debt will be worth more money, while very old debt will sell for less. Even debt beyond the legal statute of limitations is salable, since some consumers will not understand their legal rights, and will actually make payments on technically expired debt if faced with aggressive collection techniques.
Since junk debt buyers many times purchase debts for pennies on the dollar, they are likely to offer huge discounts to debtors. Relatively newer debt can many times be paid off for 40 cents on the dollar and old, almost worthless debt can be settled for much less.
Consumers need the help of a qualified debt relief agency in order to understand the type of debt they owe along with the options for settlement. While many consumers first go to a non-profit debt counseling firm to obtain a “debt management plan,” over 70 percent of these arrangements eventually fail because the monthly payments become prohibitive, even though a plan to consolidate credit cards may have been introduced. Although the upfront costs of non-profit agencies may be enticing, the end results can turn out badly.
Junk debt buyers are aggressive collectors who could care less about the plight of the debtor. Since their companies own thousands of dollars of purchased debt, these collectors are interested in quick money only. They many times violate the rules of the Fair Credit Collection Practices Act, while they make the lives of debtors miserable with constant harassment through letters, emails and phone calls.
Consider the use of a quality debt settlement firm for assistance with consumer debt problems. If junk debt is the problem, consult an expert in the collection of this type of debt.