Repo Doesn't Stop Collection Calls

[David A. Szwak]

Repo doesn't stop collection calls
Ask Dr. Don by Don Taylor, Ph.D., CFA, CFP • Bankrate.com
http://www.bankrate.com/brm/news/DrDon/ ... dtype=pfin

Dear Dr. Don,
I was wondering how long I should keep past statements from utilities and credit card companies. Also, please tell what I can do about an auto loan that went through voluntary repossession in 2002. The auto company went into bankruptcy shortly after the voluntary repossession, and the last activity was at that time as well, over four years ago. I really do not have the desire to pay this auto loan. If I could afford the payments, then it never would have gone into voluntary repossession. However, the collection agency keeps calling and harassing me and my wife about the loan.
-- Jeff Jettison


Dear Jeff,
It's easy enough to get the bill collectors to stop calling. Tell them to stop calling. Granted, you have to do it in writing, but the phone calls will stop. The Bankrate feature, "Yikes! Collectors are calling day and night," explains your rights under the Fair Debt Collections Act, as does the FTC publication, Fair Debt Collection.

While a voluntary repossession is marginally better than an involuntary repossession on your credit report, you still owe any deficiency on the car loan. Laws vary by state, but in general the creditor sells the car and you are responsible for the balance, including repo costs, auction costs, etc. The negative information about the repossession stays on your credit report for seven years.

Often, a collection agency makes a big push just before your obligation to repay expires due to a statute of limitations on the contract. The Bankrate article, "State statutes of limitations for old debts," explains the statute of limitations for delinquent debt. It's important not to reconfirm the debt, because that could start the clock over on the statute of limitations. When in doubt, talk to your attorney.

As for holding on to old bills, check out what the utility companies and credit card firms offer in the form of online statements, and that may be sufficient. In doing my taxes for 2005 I was able to call up all my 2005 cell phone bills online, and it made chronicling those business expenses a snap. The earlier Dr. Don column, "Home records retention," provides a perspective on records retention, but the GSA Publication, Keeping Family/Household Records does an even better job in helping you to organize your household paperwork.


To ask a question of Dr. Don, go to the "Ask the Experts" page, and select one of these topics: "financing a home," "saving & investing" or "money."

Bankrate.com's corrections policy -- Posted: May 5, 2006