Benjamin Franklin, Poor Richard’s Almanac; 1758
Creditors do have better memories than debtors. That was true in Franklin’s time, but it is also very accurate today. It can also be said that they have better memories but also better resources, technology, time and a greater ability to affect us down the road. In Franklin’s time, a creditor could only affect you in a limited capacity. However, if you fail to make a payment to a creditor today and it goes long enough, they can call, email, write letters, attach liens, get a judgment, repossess merchandise, and affect your credit report. Creditors can and will remember the debt for as many years as they need to collect it. The whole idea here is that no matter what you think can happen, and the odds are that you will inevitably underestimate the impact that avoiding debt will have on you. No matter if it is 1758 or today, the law has usually sided with the creditor. If you borrow money, you have entered into a contract that will be enforceable by law.
Having dealt many years with credit issues, I have come to one conclusion: the only way to avoid debt is to pay it. The problem is that if a company finally deems a debt to be uncollectible, it does not get shoved into a box somewhere and filed away on a shelf. It gets sold off to another company that will buy the debt for cents on the dollar. The original creditor recoups some of their money, and the problem is no longer theirs. The new owner of the debt can now continue to collect the total debt plus fees. Originally the debt was with a company with limited resources to collect, but now the new owner has only one job: collecting the debt. It used to be that a negative account would stay on your credit report for seven years after the last activity. That is still true, but if the debt continually gets sold to collection agencies each time it gets reported, the date of the last activity gets restarted.
Creditors have always had better memories than debtors, and in modern times they also can continue to affect your financial life. The best rule here is to realize that you can never avoid debt. You just delay paying it but not without dire consequences to your credit and finances.
