Dear Debt Adviser,
A collection agency says I owe them for a credit card account I have never heard of. I am confused about how I will determine if the statute of limitations has passed on the debt. What do you go by? There are so many little things on my credit report, and I’m not sure what they mean. The debt collector is taking me to court. They say I must bring my bank statement, a list of all my assets and what I owe. They said they will take my property if I can’t pay. They say I owe $941. I live in Maine. Can they do what they are threatening to do? One credit report says I opened the account in 2003. Another report says 2007 but gives the most recent account status as from 2004. I’m confused.
If you’ve never heard of this account, I’d start there. You need to be certain that the debt is really yours. Somewhere in the vicinity of 25 percent of all credit reports have errors on them. Considering the billions of pieces of data that move into and out of credit files every month, I’m surprised the error rate isn’t higher. Some errors are minor and others more serious — like someone else’s account being on your report.
Of course, you may have forgotten about this debt because it is so old. It might be yours. So my first suggestion is to ask the collector to provide you with verification of the debt. If you request verification, the law says they must prove that the debt is yours and stop collection actions until they do so. Be sure you keep records of the request you sent to the collector for debt verification.
Once you receive the information from the collector, compare it with what is appearing on your credit reports. If they provide proof that the debt is yours and you have the money, by far the easiest thing to do is just pay what you owe and move on with your life.
If you don’t owe the money, or even if you do, I suggest you speak to a really aggressive attorney who would be willing to take your case on a contingency basis. The contingency fee would be based on suing the collector for using threats, like saying they will take your property, that appear to be in violation of the Fair Debt Collection Practices Act, or FDCPA. The FDCPA states a collector may not say they will take an action unless they are actually planning to do so. The collector may not legally seize any of your property to satisfy your debt unless the property is collateral for what you owe. There have been some big awards for violations of the FDCPA.
Either way, if this case goes to court, so should you. If you don’t appear before the judge, the collector will get a judgment for the debt that can be used to garnish your wages. The statute of limitations for suing in court to collect a debt looks to be six years in the state of Maine. Typically the clock starts after the debt charges off. The definition of charge-off varies by state, but is generally 120 to 180 days from the date of your last payment.
Should the debt be uncollectible in court due to the statute of limitations, you can add yet another violation of the FDCPA to the list your attorney will be suing for. Bringing an action on a debt that is past the statute of limitations is not legal. If you go to court on your own, simply appear in court and submit documentation showing the statute of limitations has expired and the court should find in your favor. If, however, the debt is collectible in court, I recommend you determine how you will pay what you owe. Working out a repayment plan with the collector before your court date is even better.
Ask the adviser