Will my debt go away if I repair my credit?
What happens to the debt when an item is deleted from a credit report through credit repair?
If you are one of the few people who have been able to find a reputable credit repair agency to assist you in repairing your credit, you may be wondering what happens to the debt that is connected with the items that were deleted from your credit report. Many credit repair companies will tell you that they are deleting the debt from your credit report and that you will no longer have to pay it…this misleading information is extremely false and can potentially lead a person into a false sense of accomplishment in thinking they have defeated their financial obligations.
Credit repair happens when items on a credit report are not reporting within the basic requirements of the FCRA. The debt obligation that is attached to those items is not satisfied if the items are not reporting accurately. Essentially the debt is still floating around somewhere in “debt land” so to speak, and it is possible that another creditor may come along and purchase that debt and attempt to collect on it if they feel it is worthwhile to do so. If this does happen, the collection agency is required to send a letter to the client notifying them that they have purchased that debt and are allowing them 30 days to dispute the validity of that item. The great news about it is that if you receive this letter you then have the opportunity to work out an arrangement with that collector (get everything in writing) and satisfy the debt and potentially avoid the item from being reported on the credit report again through the “new” collection agency who just purchased that debt.
It is important to understand that credit repair, if done correctly or through a reputable and FTC compliant agency, can do wonders for a person’s credit report…HOWEVER the debt that you owe that collector will not be going anywhere. Anyone who advises you otherwise is probably lying to you (except in rare cases) so doing yourself a favor and run away from any false promises of debt elimination through credit repair.
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