My thoughts on the moral issue are this. Yes you owe the debt...from $1 to $10,000. I partly think yes you should pay.

The flip side is that the company is allowed to charge off the debt and receive some sort of "benefit" or "refund" for not receiving this debt, so they are some how paid for this debt if not by the original debtor.

Additionally, this bad debt is on your credit report for 7 years. This negative reporting leads to the inabillity to get credit and any credit you get is usually in the form of a much higher interest rate than you would have if the debt had been paid. Granted it is the fault of the debtor for not paying the bad debt in the first place, but the consiquence and punishment of not doing so is the higher interest rate which leads to paying much more for the car you need to support your family and possibly the other things you need to feed and clothe them...not to mention the fact that many are using credit cards(most likely higher interest rates) to pay medical bills.

So my point is, not paying debts result in many forms of punishment related to not paying it. So has your debt not been paid 10 fold by other means, even though the bad debt hasnt been paid?

It is a benefit of sorts to the credit industry for debts to fall off...this allows them to give credit over and over again to those that have had debt problems to begin with. Most of those with debt problems pay huge rates and end up paying many times over the value of whatever goods and services they received....granted it is their choice to use credit, but in many cases (IE: purchasing a car) you dont have much of a choice.

The laws are in place for a reason and I assume written as such to protect both the debtor and the collector. They should be followed on both ends as well as respected.

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Tex,
Good topic. Here are my thoughts. As far as the 7 year rule, aside from what the Bible tells us, there is no special commission that defines a consumer was credit rehabilitated at 7 years. Why do I have to wait 7 years for a negative item to disappear? The laws do state that after 7 years that negative items must drop off the credit report, otherwise if it were not for those laws, you can bet that the creditors and credit reporting agencies would go on reporting items for as long as they could. Interestingly enough, if the items drop off of your credit report after 7 years, isn’t that a form of credit repair that the credit reporting agencies are doing? Here is another good point that I have said in a previous post, the credit bureaus are in the business to make money, right? We know how they make money by capitalizing on our information. So why do I have to support there capitalistic ventures which can have a potentially profound negative impact on my financial life? I have no moral obligation to support corporate greed because of that. I feel that I get punished enough with all the debts and CA's I have to deal with and the high interest rates that I am charged. Do you really think that credit reporting agencies play fair? We all know that some or most collection agencies do not play fair. Or how about when I have paid on a debt and it ends up in some collector’s hands. I know I have paid on the debt but now I am being asked to pay 10 times the amount just because they can charge that? Now, I’m not an advocate of running up a bunch of bills and then refusing to pay under the protection of the fdcpa, I believe that we should pay our debts. But let’s be fair about it and the industry is definitely stacked against the hard working consumer who is trying to feed and clothe his family or provide shelter.

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This topic has been very interesting. It's neat to learn everyone's different opinions on these issues. I do want to pay these debts that were charged off while I was in a bad debt settlement program. I just want the creditors to be fair about it. I have been paying on two religiously and the original creditor has been cashing the checks and posting the payments to my accounts. I have dealt with some scavenger debt collectors also during this process.

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You want my 2 cents? Why should I feel a moral obligation to pay a company that can violate the contract I signed with them at any time, and can change the terms with just a mimimum of notice to you? But yet if I violate that same contract they can take me to the cleaners.

Sorry for sounding so harsh, but I am steamed right now. I got served papers for my CapOne account, and I am royally screwed.

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What about a call made stating you owe a debt well over the SOL? I did not acknowledge it, as they didn't appear to know my address or phone #. Said item not on any credit reports, so I'd hurt myself by even considering payment. In CA, I hear you have to give permission for anyone to see your credit report. GOOD IDEA!

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This brings up an interesting point about being past the SOL. My husband signed up with CCCS this past fall and had a Sprint phone bill that was past the SOL. They were trying to get him to settle on it but his debt counselor told him not to worry about. Just to make sure it was removed from his credit report since it was over 8 years old.

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Interesting reading here. I'm learning alot on here.

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When I'm good, I'm very good, but when I'm bad, I'm better.

There's a link you can check the SOL in your state on this site, also on MSN.

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im needing the limitation on collection for the state of missouri, the company in question allide interstate, i think i spelled it right the loan was given by the dept of education and the colletion services has been calling me and my family for years on this claim. the claim was not taken care of because i don,t see the right where i have to pay it if i never got the services by the school who made the loan. this has been going on from the start the loan was given in 1990 this is now 2007 well over a limitation.

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It seems that some of the people posting have what I would call a morality of convenience. When you accepted the money from a a lender, did you accept the legality of the need/requirement to pay it back? Some people have a strange definition of "necessities". For some people, going out for a drink after work is a "necessity", even if it gets in the way of paying back what one owes to another. Is having children you can't afford to support or living in a big house with a mortgage you can't pay a necessity?

I agree that there are times when a person simply cannot pay back what he or she owes. But let's not get this confused with it being a moral decision. When one makes a loan or accepts credit, you make a moral and legal promise to pay it back. The morality of it does not change even if the legality goes away.

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I have very little sympathy for most of our credit industry. With a major bank on every street corner in the nicest building and you wonder where they made all that money. I feel no moral obligation to pay any PDL or IPDL other than maybe the principle if it is a store front. I think they should all be illegal. I feel no moral obligation to pay fees in order for banks to make fat profits i.e. late fees, over limit fees and what ever other fees they have conjured up. I feel no moral obligation to pay the interest on a high interest rate loan especially when they agreed to one rate and later they switch it to 29% or whatever the max rate is. I feel no moral obligation to repay any debt after bankruptcy other than debts that can not be bankrupted i.e. taxes and student loans.

Frankly our banks are out of control when it comes to handing out credit and there biggest profit is made on those that really can not afford the debt to begin with. Basicly they make a lot of money when you default. Personally I think all credit interest rates should be capped at prime + a couple percentage points on all loans. This would force creditors to take caution when they hand out credit and it would force borrowers to learn to live at their means. It would end the days of CC companies handing out cards to people with no jobs, diasabled, students, mentally retarded, deceased, pets and people that never even existed.

The only credit I think our society benefits from is low interest home mortgages and maybe auto loans. The rest of it is garbage and is only offered to take money from you and put it in the pocket of a banker. A couple of great quotes are "Cash is King" and "The borrower is slave to the lender".

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dollarsandsince,

wow, did you say a mouth full. I wished you where with me when I made some the most dumbest financial mistakes of my life, I would be better off now. keep on preaching.

thanks

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85% of the population who are getting credit to purchase items or enter contracts for a service have/had every intention of paying for them.

I believe that at least 30% of these people are trying to live above their means and become a victim of circumstance by a loss of employment, death in the family, medical illness.. ect. Only half of this 30% will ever pay for the things they purchased or services they recieved on credit.

I also believe that everyone should pay for the services provided and also for the things they purchased because I consider it stealing not to.

Everyone should take care of their family and their necessary needs first. If a person finds themselves in a situation where they hit a bump and got snowballed with bills then they should pay for those services when they can. Even if it takes 10 years.

Americans are sadly uneducated when it comes to credit. Propaganda from coperations and people make credit seem like a really cool thing and it is. But only if you handle it responsibly by being able to plan accordingly should somehting happen.

All credit card contracts tell you that the balance can be called due at any time. Most people don't think about these things when they are signing on the dotted line for their extra 15% off of their purchase for getting approved.


I myself and still paying for things that I did well past 7 years ago. I take them one at a time. I'm not about to not let my family have a life so I budget in one old bill a month. It might have taken me forever to get it taken care of but I did. I admit I probably could have paid a lot of these things off sooner. I didn't because I was uneducated, scared and stupid.
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collection agencies are a whole 'nother matter for me because I am a collector. I follow the law, the company I work for follows the law, and those who don't in the place I work for quickly end up unemployed. I hear story day after day and I deal with complaint calls day after day about my employees. So to be totaly honest here I don't believe some of the things I see people post here. I try to be impartial and deliver the best advice I can and hope that helps them.

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That last post was mine. Dunno why it logged me out to post it.

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I agree that part of the debt problem today is predatory and sub-prime lending. The companies know that there is a great risk. The lend mortgages to people who can't afford a house to begin with.

I agree that there is a moral obligation to repay what is borrowed. But -- as to debt purchasers, etc. there is no moral obligation. Most of those sort of companies are totally without morals themselves, and are in it only for the love of money.

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The science is in knowing, the art is in perceiving - Robert Fripp (1946-)

Ever get the feeling you've been cheated? - Johnny Rotten (John Lydon) (1956-)

Junk debt buyers are in a way becoming the creditor. It doesn't really matter how much they purchased the debt for. It it like when some Chase credit cards were bought by CitiBank. Chase no longer is the creditor on said credit so does that mean you don't owe the debt anymore? It doesn't.

The tatics that some collectors use are completely illegal and very ignorant. But it is still a debt that the consumer made.

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