Times are tough for everyone, including debt collectors. In some cases debts collectors try to “revive” dead debts in order to make a quick buck. Fortunately there are laws that protect consumers from being sued or harassed for debts from long ago. Knowing the rules can save you money and worry.
Every state has a legal statute of limitations that governs the length of time a creditor has to file a lawsuit against you. The time limit varies depending on the type of debt (e.g. a credit card debt, oral debt, written contract, etc.). Once the statute of limitations has passed, the debt is no longer “legally” enforceable – but that doesn’t mean you can’t get sued! The statute of limitations is a legal defense that is raised in court and its application is ultimately for a judge to decide. If you are being threatened with legal action, speak with a qualified attorney who can review your contract and decide if the statute of limitations defense can be raised in your case.
The statute of limitations will not stop telephone calls or other collection harassment. However, there are laws to protect you. The Fair Debts Collections Practices Act (FDCPA) is a federal law intended to stop abusive collection activity. Under the FDCPA, if you inform a third party collector (i.e. a collection agency or attorney) that you have no intention on repaying the debt because it is protected by the statute of limitations, the collector must stop contacting you. It is best to notify the collector in writing and by certified mail. A collector who continues to harass you after such notification is subject to damages and penalties, including paying your attorney fees.
Finally, another federal law called the Fair Credit Reporting Act (FCRA) states that the reporting period for a debt begins at the date of delinquency and runs for seven years plus 180 days after your last payment. Delinquent payment information must be removed from your credit file after that period has expired. The important date is the last payment activity, not when the account was sold or transferred. If a creditor or collection agency is reporting an old debt as delinquent in violation of the FCRA, you can ask the credit bureau to remove the report from your file.
Years ago old debts were simply charged off and forgotten. Now, certain collection agencies specialize in old debts and rely on your ignorance and guilt to coerce payments. There is nothing illegal about asking, but you have legal rights that will protect you from harassment. Get the facts from an experienced attorney and lay these debt debts to rest so you can have some peace.