|
 Dear Debt Adviser,
How long can a collection agency collect on credit card debts that are more than 7 years old? The statute of limitations on such debt is four
years in my state. How can I stop collectors from contacting me, and what are the repercussions on my part if I succeed? Can they continue to
hit my credit?
-- Lupe
 Dear
Lupe,
They say only two things in life are certain: death and taxes. Well, I'd add a third category for collectors.
Until a bill is paid, it is in play, and you may hear from someone trying to collect it. The request that you pay up may not have the force of
law behind it, but that doesn't stop a motivated collector from asking for money.
The Fair Debt Collection Practices Act contains federal rules for conduct and processes relating to collections. You can find some helpful tips
and a copy of the law at the Federal Trade Commission's Web site.
States have rules, too. So while one answer doesn't fit all, I am happy to offer some general guidelines, along with my own personal viewpoint.
When you owe a bill and don't pay it, the law gives a creditor certain options. Without these remedies, no one would lend money except at exorbitant
interest rates. Legal remedies include (to name a few) sending a bill to a collector, selling the debt to another company, taking you to court so
you'll be ordered to pay, garnishing wages and placing a lien on your property. For debts secured by an asset, there are also the options of foreclosure and repossession.
However, states also provide protection for debtors in the form of a statute of limitations, which sets a limit on how long a debt can remain unpaid
and still be considered a legally binding obligation. Depending on the state, the limit can be as little as two years (in California -- what a surprise)
to as long as 15 years.
There is also a difference depending on whether the debt is owed as a result of an oral or written agreement, a promissory note or an open-ended
account. With this complexity, seeing a lawyer is always a good bet if you want to know about your specific debt's validity.
But (as they say in the TV ads) "that's not all." Just because a debt is not enforceable in a court doesn't mean a collector won't ask you to pay it,
as you have found out. Experience shows that some people will pay out of ignorance, others out of a sense of personal responsibility and still others
to just make the collector go away once and for all. In your case, I'd urge you to check to see if the type of debt is still valid in your state.
If the debt is older than the statute of limitations, see an attorney. The attorney can write to the collector, say you aren't going to pay a penny and
demand that all further communications concerning the debt come to the law office. The collector has to comply with the lawyer's request or face a possible
lawsuit. Any sane collector will back off at this point and leave you alone.
As for your credit, the items drop off your credit report seven years after the debt is charged off as uncollectible (usually after 180 days). If you believe the credit reporting date has passed, you can dispute the listing of that account with the credit bureaus. Any documentation you provide to the credit bureaus that establishes the date of delinquency will be helpful.
Good luck!
|
