Does a debt have to be real to affect one’s credit?

| Dec 23, 2020 | consumer bankruptcy | 0 comments

While dealing with financial hardships that stem from another person’s actions can be stressful, those who cosign on loans or vehicle titles for others may understand the risks prior to taking on obligations. In some cases, a person in Kentucky may even be prepared to step in and protect his or her credit should payments on such accounts fall behind. However, imagine how it must feel to receive a notification of a hit on one’s credit score on a debt that is not even real, as reports indicate this is an unfortunate reality for some.

Recent reports indicate the emergence of a major financial concern known as debt parking. This pertains to a scenario in which a past due debt that is either fake or belongs to someone else suddenly appears on another person’s credit report. Reports also suggested that the Federal Trade Commission has already taken legal action against one company who it claims is culpable of obtaining more than $20 million in payments using similar tactics.

Reports suggest that one of the most troubling aspects of such an experience is that companies who use debt parking tactics typically do not even reach out to consumers before filing overdue reports with credit agencies. Experts also say that many of these debts are entirely fake and are created through fraudulent means. Having a fake debt affect one’s credit score can be disastrous in various ways and such an experience could hinder a person’s financial opportunities.

Individuals who suffer from the repercussions of dealing with debt, whether real or fake, may wish to know more about the available options to help safeguard their financial futures. With a variety of options to consider and topics to address, those who face similar issues could benefit from seeking legal counsel for assistance in addressing the issues at hand. An attorney in Kentucky can work toward protecting a client’s legal rights and if necessary, assist him or her in creating a strategy to seek relief from the hardships of debt.