It’s not always a good idea to pay off old debts. In fact, making even a small payment on an old debt can be the worst thing you could do for your finances.
Debt collectors can be aggressive, despite the laws that are in place to prevent them from hounding you. When you’re being pursued by a collector, your first instinct is probably to get rid of them as fast as you possibly can. The debt might be so old you don’t even remember where it came from, but you decide to make a payment anyway — a small one — just to appease them and buy yourself some time. Next thing you know, you’re getting hit with a lawsuit for the entire debt owed.
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Source Credits: Mandi Woodruff in Yahoo Finance