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"Never Pay Collections or Charge Offs" is HORRIBLE Advice (2021) - YouTube
Channel: Consumer Warrior
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it's not a big surprise to anyone that
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there's a lot of bad information out
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there on the internet and even here on
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youtube but in this video i'm going to
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talk about some advice that i'm seeing
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going around that's going to cause you
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serious problems and it relates to
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charge offs
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a lot of people are saying don't pay
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charge offs don't pay collections
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i'm going to tell you why that could be
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really really horrible advice
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and some things that you can do instead
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but if this is your first time here to
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my youtube channel
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go ahead and click subscribe that way
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you'll be notified each and every week
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when i put out new videos that'll help
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you
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deal with serious debt problems all
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right let's talk about charge offs
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i've done videos on charge-offs before
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and
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there's there's very few topics out
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there where i get more reaction and more
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like
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hate comments coming back to me saying
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that i'm just totally wrong and i don't
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know what i'm talking about
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clearly this that guy didn't go to law
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school because if if i did i would know
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that
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if a company charges off the debt then
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you no longer owe the debt and
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you can just ignore all those
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collections that are coming your way
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and in fact recently i've been looking
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at you know some videos that pop up in
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my
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youtube stream and feed that are talking
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about charge offs i see this with a lot
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of credit repair type companies
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and they have the big bold headline of
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never pay collections don't ever pay
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charge offs
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because you know you don't know them and
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just let them go away and eventually the
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statute of limitations will run
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and uh things will be great generally
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things are not great
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they don't they don't end up that way
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and to to realize and to understand
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why this information is such bad advice
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and bad information these people are
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putting out on the internet
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you need to understand the collection
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cycle when a debt like a credit card
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goes into collections it's usually
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internal collections for the first 30 to
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90 days they're calling you on the phone
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they're sending you letters
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if you've been through that process you
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know it's annoying they are
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they don't ever stop but after you they
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get to about 90 days they may farm it
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out to some other collection agencies
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they'll try their part trying to get
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this money from you
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but if it goes 180 days and they're not
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able to collect from you
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essentially from the time you made that
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last payment until now it's been
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roughly six months since you've been
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able to make a payment on it they
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are required to charge that off let me
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read you directly
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from the fdic uniform retail
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credit classification account management
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policy
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it states specifically open and retail
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loans that become past due
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180 cumulative days from the contractual
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due date
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should be classified as loss and charged
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off
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okay so 180 days goes by no payments
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made
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by law those credit card companies have
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to charge off that debt
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now the the kind of the the rub on this
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is understanding what the charge off
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means and what it doesn't mean
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a charge off means that that company is
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no longer counting
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your account that a balance owed has an
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asset on their books
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they're saying it's a loss we're not
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going to be able to collect on it it's
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uncollectible at this point
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and so this helps in making sure that
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they have a proper valuation of what
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their company is
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that they can't treat this big backlog
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of accounts receivable
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as an asset that's going to be collected
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they're saying hey we haven't collected
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anything for six months
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it's not an asset anymore when we're
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determining proper valuation of our
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company
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however if they receive money from you
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after the fact if you make some type of
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payment
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then they have to count that uh as an
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increase in the overall value
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so but what it doesn't so it that that's
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what it means but what it doesn't mean
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it doesn't mean that the debt is no
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longer
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collectible as long as it's within the
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statute or limitations
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of the applicable state each state has a
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somewhat different uh
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statute limitations as relates to credit
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card companies
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even if an account's been charged off it
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doesn't mean that it's not collectible
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anymore they can still try to call you
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and ask you to pay
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they can sell it to a junk debt buyer
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they can file a lawsuit they can sell to
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somebody else who can file a lawsuit
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if you don't if you don't believe me
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i've spent 20 years defending
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thousands of these lawsuits and so
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either the state of arizona just has it
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completely wrong maybe i'm completely
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wrong
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i know i'm not wrong the these charged
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up debts
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can be collected on they can be sued on
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and so this advice of hey just ignore
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these and wait out the statute of
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limitations
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that may work for low dollar collections
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you know if you have an old medical bill
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that's 150 bucks
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yeah you're not going to get sued for
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150 but credit cards
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larger collections medical bills
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deficiencies from car
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loans or repossessed those will often be
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sold
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to junk debt buyers and they do file
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suit that is their business model
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they're not a collection agency that's
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just going to call you call you call you
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kind of thing
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they are going to file suit and try to
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garnish your wages and hit your bank
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accounts
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that will happen and so the advice that
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i see people throwing out there on the
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internet of hey just
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just wait these things out that that
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often ends in a lot of heartache it
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often ends
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in wage garnishment it often ends in
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bank levy
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and that's why i put so much information
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about here about how to fight back
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against these junk debt buyers
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is because you have to take action to
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make this go away i think deep down we
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all know that the advice of just don't
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do anything
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is probably not a good idea it feels
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good because we don't want to have to
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pay off these collections
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but often it's horrible advice as it
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relates to dealing with these debts
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effectively
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you have debt settlements you have
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bankruptcy you have contesting these
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things
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but doing nothing will often result in
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disastrous
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consequences so i hope that helps when
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it comes to charge-offs
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understanding that just because the
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debts are charged off does not mean that
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they can't still try to collect on it
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anybody else who is telling you that on
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the internet and on youtube
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is not being truthful with you they
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either don't know or they have some
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ulterior motive for throwing that out
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there
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so i hope that that helps if all this
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information helps you that i provide on
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the youtube channel please go ahead and
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click subscribe
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like i said each and every week we put
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out at least one video some of these
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multiple videos
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that help you deal with these serious
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debt issues thanks for watching today
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