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Wednesday, July 20, 2016
Do not pay zombie debts! - Bankruptcy- Guam
Do not pay zombie debts!
Many people believe that they should not delay when it comes to paying off their debtsand getting back on the road to being in a good financial position. However, you could be in for a big – and not so nice – surprise if you send a check to a debt collector seeking payment on an old debt.
Of course, your debts can accumulate over time, particularly as the interest on the unpaid principal balance mounts, and leave you in a very difficult spot. Even if you can only make a small dent in your overall debt balance, you may think, every little bit helps. Other times some debtors get so frustrated by the debt collectors’ tactics that they actually end up encouraging the borderline-illegal behavior by giving in to the demands and paying off the debts.
But the truth is that paying off old debts could actually hurt you when planning for bankruptcy. This is because recent payments to creditors which are going to be subject to discharge can be considered an unlawful preference in favor of such creditors over other creditors not being paid.