 Statute of limitations on a judgment
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 Dear
Dr. Don,
I just received a letter from an attorney saying that I owe $2,000 from a Wells Fargo Visa account. I don't have the letter in front of me but it says that they got a judgment against me in September of 1999 and that I need to repay this debt or they will report it to a collection agency.
I live in California and I think that the statute
of limitations is six, maybe seven years in this state. This collection
does not appear on my credit report. I was told that since the statute
is up or coming up that they might be making a last attempt to collect
money from me. I just paid all my debt and have rebuilt my credit
to a good standing and don't want to have to pay off a debt that
is I think is seven years old. What should I do?
-- Kim Conundrum
 Dear
Kim,
It's possible that the judgment was removed from your credit report even though the statute of limitations hasn't expired on the judgment, although it's not supposed to happen that way. Here's what the Fair Credit Reporting Act says in Section 605, requirements relating to information contained in consumer reports, about when the item should be removed from your credit report:
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When the item should be removed from your credit report: |
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You need to get a better handle on the timing of events
before you decide what to do in this situation. If the creditor
went to court and won a judgment against you for the outstanding
debt, the judgment has its own statute of limitations separate from
the statute of limitations applicable to the credit card agreement.
A Bankrate feature, "State
statutes of limitations for old debts," shows the statute
of limitations by state for written contracts, oral contracts, promissory
notes and open accounts, but not for judgments.
The relevant statute of limitations is for the state
where the judgment was awarded, which may or may not be your home
state of California. Find out where the judgment was awarded and
you can find out the relevant statute of limitations by contacting
the attorney general's office for that state. The attorney's letter
may provide that information.
The attorney's intent to report you to a collection
agency is different from reporting the debt to a consumer reporting
agency (credit bureau). Credit bureaus have to follow the rules
of the Fair Credit Reporting Act, while debt collectors have to
follow the Fair Debt Collection Practices Act. The FTC Facts for
Consumer guide,
"Fair Debt Collection," spells out those rules.
It's very possible that the attorney is making a last
run at collecting from you before the state of limitations runs
out on the judgment. If the state of limitations has expired
then you aren't obligated to repay the judgment. If you can't
get comfortable with where you stand in this matter you should consult
with an attorney.
To ask a question of Dr. Don, go to the "Ask
the Experts" page, and select one of these topics: "financing
a home," "saving & investing" or "money."
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