http://debtprison.net/wordpress/249/debt-past-the…
had a read of this, am I right in understanding that if you don't pay your debts, then after a few years (varies on state) you don't have to pay anything any more?
I'm in the UK so won't benefit from this, but i feel this kind of knowledge should be shared, since I'm heavily against the debt industry in terms of intimidation and abusing people lack of knowledge of their rights.
Other interesting parts on the rest of the site explains how to fight the debt collection process, including forcing the collection agency to prove they have the legal right to pursue you (they cant chase a disputed payment), to prove the debt exists in the first place (chase the original company for the contract you signed, provided they havent lost it, lost contract = no debt paid) and if they take you to court, then if you issue a sworn denial, they HAVE to produce a live witness to testify, significantly reducing the chances the case will be followed up. Fascinating stuff. KYS saving money, again.
Ok but at what cost?
So you get a default on your credit rating, and any future attempts to borrow end up in you paying 30+% apr? Good luck getting car financing, a mortgage, private tuition loans, or any other form of unsecured loan in the future if that's the route you want to take. Also, interest rates on debt you currently have could increase to reflect your new credit risk status (depending on what terms/rights the creditors have according to the loan docs you signed with them).
Unless you can see yourself not needing debt for the foreseeable future, then I don't think an outright default is worth it. Better to come to an agreement with your creditors on a debt payment plan / principal reduction etc with the agreement that any marks won't be placed on your credit rating, and any prior ones removed.
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