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Information and advice about collection calls on 12 year old debt - The Bills.com Blog
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Information and advice about collection calls on 12 year old debt
Saturday, Jan 5, 2008
Question: My husband purchased a truck in 1995 and turned it in less than one month later. The account was turned over to several collection agencies. We obtained a home loan in 2003 and at that time, that delinquency was no longer on his credit report. We have had his credit checked several times since then and it remained off of his credit. Well today, we received a bill from another collection agency on the outstanding balance from 1995. I thought that something only stayed on your credit report for 7-10 years. This thing is haunting us. Can they still send us a bill after all this time?
Answer: A collection agency can contact you attempting to collect a debt for an unlimited amount of time -- neither the limit on how long an account can appear on your credit report, nor the statute of limitations (the time period a creditor has to sue you to collect on a debt) prohibits a collection agency from contacting you to try to collect an old debt.Federal law (US Code Title 15, §1681c) controls the behavior of credit reporting agencies. This law is known as the Fair Credit Reporting Act (FCRA). Under FCRA §605 (a) and (b), an account in collection will appear on a consumer's credit report for 7.5 years. The clock starts approximately 180 days after the date of first delinquency on the account. To learn when an account will be removed by the credit reporting agencies (TransUnion, Equifax, and Experian and others), add 7.5 years to the date of first delinquency. Subsequent activity, such as resolving the debt, is irrelevant to the seven-year rule. However, if the debt is a tax lien, that can appear for seven years from the date of payment. A bankruptcy will appear for ten years from the date of the final order. Delinquent federal student loans can be reported indefinitely, i.e., for as long as they are delinquent.
Just because a debt is removed from a credit report that does not mean the statute of limitations has passed. Federal credit report laws and a state statute of limitations laws are separate and independent from each other.
You are not required to pay the debt simply because a collection agency contacts you. Do not make any payment on the debt, as doing so could reset the statute of limitations, depending on your state's law, thus allowing the creditor to take legal action against you for this old debt. A collection agency's contacting you does not necessarily mean that you are legally obligated to pay the debt, nor
does it mean that this 12-year-old account will reappear on your spouse's credit report.
You are correct that most items can only appear on your credit report for seven years, while certain types of records, such a bankruptcy filings, are reported for ten years as mentioned above.
Since the deficiency balance on your spouse's old truck is more than 12 years old, it should no longer be appearing on his credit reports. I will discuss these issues below in more detail, but the bottom line is that your husband can probably no longer be sued on this debt and it should not be appearing on his credit reports, so he really has no reason to be concerned about the debt; if he sends a cease communication demand letter to the collector, he should also be able to stop the phone calls.
If a creditor wishes to file a lawsuit against you to collect on a debt, it is required to file suit within a certain time period, referred to as the Statute of Limitations. Basically, a statute of limitations (SOL) is the time period during which a creditor can take legal action (i.e., sue you) to enforce a debt. Each state has defined its own statutes of limitations, and they vary significantly from state to state. For example, in California, creditors have four years to sue you to enforce a debt, while in Rhode Island they have 10 years. To learn more about statutes of limitations for the collection of debts, I encourage you to visit BCSAlliance.com. While it is likely that this information available online is accurate, I encourage you to consult with an attorney licensed to practice in your state to discuss the specifics of your situation to help you determine if the SOL for your creditor to sue you has expired.
If you determine that your state's SOL for the collection of debts has expired, the likelihood of the creditor attempting to sue you to enforce the debt is much less. While the passing of the SOL does not mean that a creditor cannot sue you, if a lawsuit is filed you should have an absolute defense against the lawsuit. If you respond to the suit stating that the SOL has expired, the
You are correct that most items can only appear on your credit report for seven years, while certain types of records, such a bankruptcy filings, are reported for ten years as mentioned above.
Since the deficiency balance on your spouse's old truck is more than 12 years old, it should no longer be appearing on his credit reports. I will discuss these issues below in more detail, but the bottom line is that your husband can probably no longer be sued on this debt and it should not be appearing on his credit reports, so he really has no reason to be concerned about the debt; if he sends a cease communication demand letter to the collector, he should also be able to stop the phone calls.
If a creditor wishes to file a lawsuit against you to collect on a debt, it is required to file suit within a certain time period, referred to as the Statute of Limitations. Basically, a statute of limitations (SOL) is the time period during which a creditor can take legal action (i.e., sue you) to enforce a debt. Each state has defined its own statutes of limitations, and they vary significantly from state to state. For example, in California, creditors have four years to sue you to enforce a debt, while in Rhode Island they have 10 years. To learn more about statutes of limitations for the collection of debts, I encourage you to visit BCSAlliance.com. While it is likely that this information available online is accurate, I encourage you to consult with an attorney licensed to practice in your state to discuss the specifics of your situation to help you determine if the SOL for your creditor to sue you has expired.
If you determine that your state's SOL for the collection of debts has expired, the likelihood of the creditor attempting to sue you to enforce the debt is much less. While the passing of the SOL does not mean that a creditor cannot sue you, if a lawsuit is filed you should have an absolute defense against the lawsuit. If you respond to the suit stating that the SOL has expired, the
judge should dismiss the case. In addition, if the court believes that the creditor filed suit despite knowing that the SOL had expired, the court may sanction the creditor for its actions.
Keep in mind that in most states, the SOL begins running from the date you last made a payment on the account. This means that if you paid just a few dollars to a collector a couple of years ago, the running SOL for that debt could have been reset. Also, keep in mind that the passage of the SOL does not forbid a creditor from calling you to collect on the debt; it simply provides you an absolute defense in court if the creditor files suit. You can generally stop collection calls by sending a cease and desist letter to the creditor- for more information about sending cease and desist letters, you can visit Ihatedebt.com.
Your state's SOL has nothing to do with how long accounts can appear on a credit report. If your state's SOL is five years, an account can appear on your credit report for two years after your state's SOL has passed. A new company purchasing your account cannot lengthen the time that the account can appear on your credit report. Be careful, though, because many debt purchasers try to change the date of last activity on old accounts so they appear on your credit report for a longer time.
You need to pull your credit report and carefully review the accounts in question to make sure that no unauthorized changes have been made. If you find any suspicious information on your credit report (for example, if this old debt has reappeared on your credit report under a different name) you should dispute the listings with the credit bureaus. The Federal Trade Commission offers a helpful guide to disputing credit listings, available at Ftc.gov . To find out more about credit, credit scoring, and credit reports, I encourage you to visit the Bills.com Credit Resources page.
For further information regarding options available to consumers struggling with debt, I invite you to visit the Bills.com Debt Help page. I hope the information I have provided will help you Find. Learn. Save.
Best,
Bill
www.bills.com
Keep in mind that in most states, the SOL begins running from the date you last made a payment on the account. This means that if you paid just a few dollars to a collector a couple of years ago, the running SOL for that debt could have been reset. Also, keep in mind that the passage of the SOL does not forbid a creditor from calling you to collect on the debt; it simply provides you an absolute defense in court if the creditor files suit. You can generally stop collection calls by sending a cease and desist letter to the creditor- for more information about sending cease and desist letters, you can visit Ihatedebt.com.
Your state's SOL has nothing to do with how long accounts can appear on a credit report. If your state's SOL is five years, an account can appear on your credit report for two years after your state's SOL has passed. A new company purchasing your account cannot lengthen the time that the account can appear on your credit report. Be careful, though, because many debt purchasers try to change the date of last activity on old accounts so they appear on your credit report for a longer time.
You need to pull your credit report and carefully review the accounts in question to make sure that no unauthorized changes have been made. If you find any suspicious information on your credit report (for example, if this old debt has reappeared on your credit report under a different name) you should dispute the listings with the credit bureaus. The Federal Trade Commission offers a helpful guide to disputing credit listings, available at Ftc.gov . To find out more about credit, credit scoring, and credit reports, I encourage you to visit the Bills.com Credit Resources page.
For further information regarding options available to consumers struggling with debt, I invite you to visit the Bills.com Debt Help page. I hope the information I have provided will help you Find. Learn. Save.
Best,
Bill
www.bills.com
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1. Posted by Mike on Tuesday 3rd March 2009 06:05
Hi,I have a collection agencie calling me on a debt that is over six years old,can they file a legal motion against me for the debt after that long of a period. I live in Pa. and I am having a hard time finding info on this and what to do about this situation. Can you please help. Thank you Mike
2. Posted by William S on Tuesday 3rd March 2009 07:33
The statute of limitations in Pennsylvania is 4 years Statute of Limitations Chart so if you have not made a payment or had any activity in over 6 years you may want to seek legal counsel or send the collector what is known as a "debt validation letter" and then tell them to stop contacting you. Good luck Mike. I hope this helps you out and let us know how it goes.