When is a car loan too old for collection?

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Dear Driving for Dollars,
I co-signed for an auto loan for my daughter and her boyfriend back in 1994. They did not pay for the car, and it was repossessed. Now a creditor has contacted me for full payment of this car. It has been 19 years since I co-signed for this car! Can they collect this after all these years?
— Diane

Dear Diane,
There is a statute of limitations on all debts, including car loans. This statute varies based on the type of debt and from state to state. The clock on the statute of limitations starts ticking at the date of the last payment, so your daughter’s debt probably isn’t 19 years old unless she made just a few car payments. Still, the debt is probably old enough that the statute of limitations has passed and the collector can no longer sue. To find out the statute for your state, visit your state attorney general’s website or contact a local attorney.

Even if the statute has passed, the collection agency is still allowed to contact you, though they can’t sue you for nonpayment. You can send them a certified letter demanding that they stop contacting you. However, keep in mind that you still technically owe the debt. Nonpayment can still affect your credit score if the debt is still within the statute of limitations.

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