Debt Free Destiny

In each state of the US, creditors are allowed a specific length of time during which they can attempt to collect a debt or enforce a judgment called the statute of limitations.  In some states, though, consumers many find a judgment renewed for a second period; or forever.  In states that allow these renewals, the creditor can legally come after you for the debt owed for as long as you live.

If you have unpaid debts, creditors have several options to try and satisfy the judgment against you, including:

• Some creditors will attach a lien against your home.  You will not be kicked out of your home, but you will not be able to have a clear title for your home until the debt is either repaid or you sell the home and the creditor receives the value of the judgment (plus interest) from the sale of the home and before you receive any proceeds from selling the property.
• Creditors may try to garnish your wages.  Federal laws dictate how much a creditor can take from your pay but they have the ability to take payments for the debt directly from your paychecks before you even get paid in some cases.  You can quit your job and attempt to find another in hopes that the creditor doesn't find you – but you may end up becoming a “job hopper” trying to avoid wage garnishments.
• The creditor might freeze your bank accounts.  If a creditor locates money you have in a bank account that is not exempt by state laws, they can use a judgment to take over the funds in your bank account.

Before a creditor puts a judgment against you over nonpayment of debts, try to negotiate with them.  If you have some money saved, or can access a lump sum, your best option may be to settle with the creditor for less than the total amount owed in exchange for closing out the debt.  If you don't have money available to pay a settlement, try to negotiate an affordable debt repayment plan before you get sued.

If a creditor sues you, they can add on thousands of dollars for collection fees and attorney fees on top of the debt that you owe.  Look at your state's statute of limitations to determine whether or not your outstanding debts are still within the time frame for legal collection practices, and if so – do something about them before a judgment is brought against you.