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.
Credit Report Rules at a Glance
Federal law (US Code Title 15, §1681c) controls the behavior of credit reporting agencies (CRAs). The specific law is called 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 up to 7½ years. To determine when an account will be removed by the CRAs (TransUnion, Equifax, and Experian and others), add 7 years to the date of first delinquency. The date of first delinquency is shown in credit reports. Subsequent activity, such as resolving the debt or one debt collector selling the debt to another collector, is irrelevant to the 7-year rule.
Some debts have a reporting period longer than 7 years, including:
- Tax liens: 10 years if unpaid, or 7 years from the payment date
- Bankruptcy: 10 years from the date of filing (15 U.S.C. §1681c)
- Perkins student loans: Until paid in full (20 U.S.C. §1087cc(c)(3))
- Direct and FFEL loans: 7 years from default or rehabilitation date (20 U.S.C. §1080a(f)(1) and 20 U.S.C. §1087e(a)(1))
- Judgments: 7 years or the debtor’s state statute of limitations on judgments, whichever is longer
The FCRA 7-year rule is separate from state statutes of limitations for debt issues. Learn the lifespan of a judgment in your state at the Bills.com Statute of Limitations Laws by State page.
The start of the 7-year period begins at the date of first delinquency, or if no payments are made, when the first payment was due. Review your credit report carefully to make certain the dates of first delinquency are reported correctly. Unscrupulous collection agents reset the date of first delinquency to stretch out how long a derogatory account appears on consumer’s credit report. This is illegal under the FCRA.
Just because a debt does not appear on a credit report does not mean the statute of limitations for the debt has passed. The opposite is also true: The passing of a state statute of limitations on a debt does not mean the debt may not appear on a credit report. The federal FCRA and state statutes of limitations are separate and independent of each other.
Whether a debt appears on a credit report does not establish legal liability for the debt. The opposite is also true: You may have legal liability for a debt not reported to the credit reporting agencies. Credit reports are not legal records of every debt a person owes.
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 vehicle 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 be sued for this debt, but he has an affirmative defense he can raise to dismiss the case. That makes a lawsuit possible legally, but unlikely. Under the FCRA, the debt should not appear on his credit reports. Consider sending a cease communication letter to the collector, which will stop the phone calls.
Just because a statute of limitations has passed does not mean a creditor may not collect a debt, except in Wisconsin. The passing of a statute of limitations gives a defendant in a lawsuit an affirmative defense, and nothing more. See Statute of Limitations to learn more.
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, visit the Debt Do-It-Yourself page.
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.
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) dispute the listings with the credit bureaus. See the Federal Trade Commission document FTC Facts for Consumers: How to Dispute Credit Report Errors for more information. 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 provided will help you Find. Learn. Save.