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Advice About Old Debts Appearing on Credit Report - The Bills.com Blog
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Advice About Old Debts Appearing on Credit Report
Question: I checked my credit report and there are some old accounts on there which I'm not sure of what they are. Total they are about 5000 which I can not pay off right away. Should I send a letter to each collector to find out who the original creditor is? I don't want all of them coming at me all at once since I only can afford smallpayments.
Answer: Frequently, consumers obtain copies of their credit reports only to find old, unfamiliar accounts damaging their credit ratings. Two issues commonly arise when considering the course of action to take to resolve old debts--the statute of limitations for the collection of the debt and the length of time the debt can appear on your credit reports. Before you decide how you to deal with your old accounts, you should first determine how old they actually are. The statute of limitations for the collection of debts generally runs from the date you last made a payment, while the length of time an account can appear on your credit reports depends on the date the account was charged off by the original creditor. Once you have determined the age of the accounts in question, you can review the information below to help you determine if you should worry about these accounts or not.
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, the 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 http://www.bills.com/collection-laws/. 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. 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 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. However, if you are receiving collection calls on an expired debt, you can generally stop the calls by sending a cease and desist letter to the creditor.
Your state’s SOL has little to do with how long accounts can appear on your credit report. The length of time credit accounts can appear on your credit
report is governed by federal law, specifically the Fair Credit Reporting Act. Generally speaking, negative listings will appear your credit report for seven years, while bankruptcies will appear for ten. So 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, you should dispute the listings with the credit bureaus. The Federal Trade Commission offers a helpful guide to disputing credit listings . 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
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