Your One Stop Resource for Saving Money.
Advice on collections and statute of limitations - The Bills.com Blog
Bills.com Blog > Debthelp Questions > Collections and Statute of Limitations
Advice on collections and statute of limitations
Tuesday, Oct 16, 2007
Question: I saw a collection on my credit report, contacted the agency left a message and was called back. I was told when I that the agency had 3 collections in my name. I was not given acct. numbers but I did tell the man that I would call back the following week to pay $$ on the accounts. In the mean time, I researched a little on statutes of limitations. The accounts were from when I was young and went through a divorce, 1998, and from the state of FL. The following week, I did speak with the agency and paid the one bill that is not outside of the statutes of limitations. I told them that I was going to speak with someone about my other two accounts and call them back. My question is, did I restart the statute of limitations because I told them initially that I would "call and pay them some $$" ...
Answer: 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 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.
The seven years starts running from the date the account was charged off by the creditor, which generally means seven and a half years from the date of first delinquency. I encourage you to review your credit report carefully to make sure that the dates of last payment being reported on these accounts are correct. Some creditors, especially debt purchasing firms, will report inaccurate charge-off dates to extend the amount of time an old account appears on your credit report. If you find any inaccurate information, you should dispute the credit report listing with the bureau in question. The Federal Trade Commission offers advice regarding the dispute of inaccurate credit report listings, available at www.ftc.gov
In Florida, the statute of limitations for filing a lawsuit to collect on a delinquent debt is four years. Generally speaking, the statute of limitations runs from the date of last activity, usually the date of last payment, on the account. Based on the information provided in your question, I do not believe that your statement would affect the statute of limitations in regard to this debt. Generally speaking,
to affect the statute of limitations, a debtor must make a specific promise to pay; a vague statement such as "I'll call and pay some money," is not specific enough to change how the statute of limitations applies to these debt, especially since the collector failed to provide you with any specific information in these debt (i.e., account numbers).
Remember that the application of the statute of limitation is a matter to be decided by the court in case the creditor files a lawsuit against you to try to collect this debt. While I think it is unlikely that a collector would attempt to sue you on a debt this old, if you do receive any court documents related to either account, you should consult with an attorney in your area regarding the age of these debts and the applicability of the statute of limitations to your situation.
If you want a free debt consultation with one of Bill's approved debt help partners, click here: https://www.bills.com/debthelp/debt/. If you are struggling to pay your debts, you may want to consult with a professional debt resolution firm to discuss the options available to you.
To learn more about credit, credit scores, and credit reporting, I encourage you to visit the Bills.com Credit Solutions and Resources page at http://www.bills.com/credit-solutions/.
I hope the information provided helps you Find. Learn. Save!
Best,
Bill
www.bills.com
Remember that the application of the statute of limitation is a matter to be decided by the court in case the creditor files a lawsuit against you to try to collect this debt. While I think it is unlikely that a collector would attempt to sue you on a debt this old, if you do receive any court documents related to either account, you should consult with an attorney in your area regarding the age of these debts and the applicability of the statute of limitations to your situation.
If you want a free debt consultation with one of Bill's approved debt help partners, click here: https://www.bills.com/debthelp/debt/. If you are struggling to pay your debts, you may want to consult with a professional debt resolution firm to discuss the options available to you.
To learn more about credit, credit scores, and credit reporting, I encourage you to visit the Bills.com Credit Solutions and Resources page at http://www.bills.com/credit-solutions/.
I hope the information provided helps you Find. Learn. Save!
Best,
Bill
www.bills.com
Also, make sure to get a free financial health check-up with Bills IQ!
User Comments
Your comments
Bill has answered thousands of money-related questions from readers on debt consolidation and settlement, home mortgage, credit reports and scores, auto and other loans, insurance, and others.
If you have a money question that has not been answered previously Ask Bill your question and be better informed.
Now get a free financial health check-up with Bills IQ!
Information provided by Bills.com is for general informational purposes only and is not be
construed as legal, financial, bankruptcy, tax or other professional advice. Should you
require more detailed information or specific professional advice tailored to your situation you
should consult an attorney, financial planner or tax advisor.
While we believe all information provided by Bills.com to be accurate as of the date of its posting, we cannot ensure its accuracy. Use of this site and any information contained on or provided through this site is provided without any representations, warranties or guarantees. Bills.com is not responsible or liable for any decisions or actions anyone may take based on the information provided. Please see Terms of Use.
While we believe all information provided by Bills.com to be accurate as of the date of its posting, we cannot ensure its accuracy. Use of this site and any information contained on or provided through this site is provided without any representations, warranties or guarantees. Bills.com is not responsible or liable for any decisions or actions anyone may take based on the information provided. Please see Terms of Use.
© 2006 - 2010Bills.com LLC. All Rights Reserved.
1. Posted by Tom Prophet on Friday 7th December 2007 16:52
I live in maryland. I have 4 medical debts and two of them are on my credit report. The other two are over three years old. Can the collection agency still add the two that are over the statute of limitation law onto my credit rport? Should I deal with the two that are on the report? or pay them in full.
2. Posted by brookesabal on Friday 7th December 2007 17:10
Anything can stay on your credit report for up to 7 years. Statute of limiations does not relate to credit reporting, but rather the period of time over which a collector/ creditor can pursue a lawsuit against you from debts owed.
3. Posted by Bea on Monday 27th October 2008 09:51
I have old medical bills in collection and i called and made a payment plan, did I restart the statues of limitaion by that phone call?
4. Posted by Bill on Monday 27th October 2008 11:25
The statute resets if you make a payment on the account.
5. Posted by eli on Sunday 14th December 2008 17:09
I have recently received a collection notice in the state of kansas for a phone bill that is at least 5 or 6 years old from NCS. The original bill is from Sage telecom and I do not think we actually owe any money to this company. Both my husband and I have perfect credit but now I am worried they are really hurting my credit score. We have not heard anything regarding this debt for over 5 years and all of the sudden they are claiming we owe 200 dollars from a 50 dollar bill from 5 years ago or longer. This cant be legal. I also believe that the statute in kansas has expired. Please advise us on how to deal with this situation. Thanks.
6. Posted by Bill on Monday 15th December 2008 06:40
You should request, in writing, for them to validate the debt (send them a Debt Validation Form). This should help you establish if you really do owe the debt and if the statute of limitations has expired. Also, be sure to pull your credit report and see if it is listed on your credit. Good luck.
7. Posted by Angela on Thursday 2nd April 2009 12:57
I was called recently about an old debt owed at a hospital from back in 2002, now 7 years later I'm being called by people saying I owe from that. Would I still have to pay?, and What is the law that is listed under?
8. Posted by Bill on Thursday 2nd April 2009 16:27
That would fall under the Statute of Limitations. These statutes vary from state to state. To check for you state please visit http://www.bills.com/collection-laws/. What it basically means is that the creditor has a certain period of time to take action against non-payment of the debt you owe them. Once that time passes, you are not required to pay on that debt but, that does not stop the collector from trying to collect on it, it just means that if the creditor were to file a court case, the judge would easily dismiss the case based on the fact that the statute has expired.
9. Posted by Winston Perry on Thursday 12th November 2009 18:52
I have 3 medical debts dating back to jan 04 and 06, they all amount to 650 dollars, is there a limitation to how long they can keep harrassing me ?
10. Posted by Bill on Friday 13th November 2009 11:02
No, there is not a limit as to how long a creditor can continue to attempt to collect an unresolved debt. Please see Collections Advice to learn more about your rights.
11. Posted by Gregg Savella on Thursday 3rd December 2009 22:00
I moved from California to Hawaii. I still used my cell phone with a California area code. For the last 2 months I have been a week plus late in paying a credit card. During daylight savings time Hawaii is 3 hours behind California. The credit card company started calling me at 5:00 A.M.! I called them back and told them that we moved to Hawaii to stay and help our son's family out while he is in Iraq. They told me that they base their collections calls on the area code of the debtor not the address. They have my Hawaiian address, but still call me based on California time. Now that California is on standard time they start calling me at 6:00A.M. Is this legal???
12. Posted by Bill on Friday 4th December 2009 09:16
The Fair Debt Collection Practices Act is a federal law that sets the rules that people collecting debt from consumers must follow when collecting debt. The FDCPA's "§ 805. Communication in connection with debt collection" reads in part:
"Without the prior consent of the consumer given directly to the debt collector or the express permission of a court of competent jurisdiction, a debt collector may not communicate with a consumer in connection with the col lection of any debt -- (1) at any unusual time or place or a time or place known or which should be known to be inconvenient to the consumer. In the absence of knowledge of circumstanc es to the contrary, a debt collector shall assume that the convenient time for communicating with a consumer is after 8 o’clock antimeridian and before 9 o’clock postmeridian, local time at the consumer’s location;"
The "we base our collections calls on the area code of the debtor" may be their policy, but it is contrary to the FDCPA. Send the collection agent a registered letter that quotes the above, and explain that the penalties for violation of the FDCPA's rules are set forth in §813 of the act, and include actual damages plus $1,000 per violation.
13. Posted by Nathaniel Crawford on Thursday 10th December 2009 12:50
can a debt colletor charge intrest on an old legal bill that has been dissmissed by the state itself?also if the state dissmiss a court case shouldn't the bill be dissmissed as well?
14. Posted by Bill on Thursday 10th December 2009 15:24
A collection agent can continue to try to collect a debt that a state court dismissed. If the case was "dismissed with prejudice" the collection agent is prevented from using the court system to collect that debt in the future. Send the collection agent a "cease communication" letter to prevent it from calling you on the telephone. A sample of which is available at the Bills.com debt self-help center. To learn more about your collections rights, see Collections Advice.