Collection Calls on 12 Year Old Debt

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READER QUESTION

We received a bill from a collection agency on an outstanding balance from 1995. Can they still send us a bill?

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Bills.com Resident Expert
Jan 30, 2012
HIGHLIGHTS
  • The passing of a statute of limitations does not mean the creditor is barred from collecting the debt in most states.
  • The statute of limitations does not prevent the filing of a lawsuit in most states.
BILL'S 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 7½ 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 7½ 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 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.

Best,

Bill

Bills.com

Comments (22)


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Robin B.
West Palm Beach, FL  |  January 30, 2012
I received a call from a collection agency about an old credit card debt of 10 years ago in the amount of $1000. I was asked to make payments monthly but declined. I was told that this debt would be turned over to the IRS for collections and I would have to deal with them. Is this possible and will the IRS come for me for a debit owed to a credit card company?
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Bills.com
January 30, 2012
You were told a complete falsehood, but I have to give the collection agent bonus points for creativity. The IRS collects taxes for the federal government. As such, it has plenty of work to keep its agents busy. The IRS is not a collection agent for delinquent credit card debts. I suggest you validate the debt.
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Tess S.
Oakfield, WI  |  January 18, 2012
I just received a letter from Convergent Outsourcing Inc regarding a debt. I called and they informed me it was with AT&T from 1999 and I am required to pay the balance in full immediately. I argued with the lady and she hung up on me? In 1999 I lived in IL. I have resided in WI since 2001. I do not recall seeing this on my credit report nor do I remember ever owing anything to AT&T. Am I protected from the statue of limitations from IL? Am I required to pay this or should this be a thing of the past?
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Bills.com
January 20, 2012
First, do not pay anything unless the collection agent can validate the debt. Send a debt validation letter immediately because there is a time limit for doing so. If a collection agent cannot validate a debt, it may not collect it.

Second, you mentioned Wisconsin. America's Dairyland protects consumers with an excellent statute of limitations law that outlaws the collection of debt that is older than Wisconsin's statute of limitations for that particular species of debt. Consult with a Wisconsin lawyer who has experience in consumer law. You may have just won a small amount in a lottery, so to speak.
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William S.
Fairfax, IA  |  November 14, 2011
I recently was contacted by a bill collector about a credit card account that went delinquent in 2000. It has not been on my credit report in the last 5 years that I have been checking my report. Not sure if it was on the report before that. I currently hold a cedit card that is in good standing from the company the collection agency says my delinquent account is from, the account numbers are not the same so they are saying this is an old account. I don't ever remember having a cedit card from this company they say the account was open in 1999 and went delinquent in 2000. Should I ask for the signed contract saying I opened the account? I'm not sure what to do at this point?? should I pay it or fight it. I just dont want this showing up on my cedit report 11 yrs later. I'm from Iowa not sure on the local laws Thanks for any help
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Bills.com
November 14, 2011
By all means, validate the debt.
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Chris R.
T/o Upper Darby, PA  |  November 03, 2011
i recently got a bill in the mail from a collection agency concerning an old bill from verizon in 2004. Iwent thrugh my records and found a check that i paid the account only problem is that i paid be phone and the check is only a receipt for my self and holds n ground as proof of payment, i tried calling the bank to get old statements but ive had no luck. from what ive been reading on the page its past the statue of limitations for pa and i shouldent even worry about it is that correct or how else could i handle this?
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Bills.com
November 04, 2011
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.

My advice? Validate the debt.
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Mark M.
Howell Twp, MI  |  October 12, 2011
Hello, I had a bad debt that technically I did not owe, but had no proof. It was an old health club bill. It was from 1998. It has long since been on and off of my credit report. All of a sudden, i have gotten collection calls. I did not admit responsibility. I simply said "I do not owe any money. I will not pay any money. Note your account". The foreign gentleman stated that this will reflect poorly on my credit report. Am I correct in my assumption that A) Since this debt has already been on my credit report and has fallen off, they can't resubmit it? B) Being that the debt is 13 years old, they can't report to credit bureaus? If they DO report it again and it appears on my report, what are my rights? Can they be sued for harrassment?
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Bills.com
October 12, 2011
Most derogatory entries must be removed from a consumer's credit report after 7½ years. (The reporting times for bankruptcies, federal student loans, and judgments are longer.) The rule I mentioned is called the Fair Credit Reporting Act, and is a federal law. The FCRA contains penalties for creditors and the consumer credit reporting agencies for violating the law. Follow the link I just mentioned to learn more about the FCRA.

On to your questions:
  1. The FCRA has no, "Once a debt appears and disappears, it cannot appear again," rule. The 7½ rule is the significant rule you need to focus on.
  2. The date of last delinquency is when the 7½-year clock starts to run. If the date of last delinquency was 13 years ago, this debt is well outside the 7½-year rule.
  3. As mentioned, the FCRA gives consumers a cause of action against creditor who report erroneous information on a consumer's credit report.

Collection agents are not consumers' lawyers, and the legal advice they dispense may be incomplete, misleading, or just plain dead wrong. Collection agents have one job — collect money. Some make outlandish claims in an attempt to motivate them to make a payment.

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Tom S.
Oakwood, OH  |  September 07, 2011
Bill, I live in Ohio and yesterday I received a letter from Portfolio Recovery Associates, LLC about an old debt. They purchased the account in July 2011. The last time I believe there was any activity was in 2002 and upon checking my credit report to verify any information on this debt, The debt itself has been dropped by my credit report. My questions are 1 : Did it drop off my credit report 7 years after the last activity I did? 2 : How would I go about checking my credit report that it falls under the statute of limitations in Ohio of 4 years 3 : What should be my next action in dealing with this old debt.
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Bills.com
September 08, 2011
Yes, it fell off your credit report after 7½ years from your first delinquency.

Start by validating the debt.

Don't pay a penny if the debt is past the SOL. You can also read more about Ohio collection laws.
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Jeff L.
Barrington, NH  |  September 02, 2011
Bill, I have a company called West Coast Filing Services trying too sue me for credit card debt from 8 to 10 yrs ago. I just made up a couple of letters today and going to send them out tomorrow by mail. They are trying too impose wage garnishment I guess they had a processor trying too track me down for few years now. 1st letter was a Limited Cease and Desist Letter and the 2nd was a Debt Validation letter is this the proper way of doing it. I live in N.H.
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Bills.com
September 06, 2011
Jeff, it depends on whether the creditor already has a judgment against you. Pull a credit report and see if there is anything in the 'public records' area of your report.

It very likely is the case that it is a collection agency trying to collect on an expired debt, hoping to intimidate you into paying through bogus threats. If that is the case, then you took the right steps.
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Teri T.
Seattle, WA  |  August 17, 2011
Bill; A debt collector sends me an occasional bill offering to cut the old debt in half along with payment arrangements. What really gets me is that for several years now they continue to do an Inquiry on my credit report of which affects my credit score. This is a 13 yrs ago credit card debt way past the statute of limitations. Question: The company is called; Asset Management. Can they lawfully send me collection notices and perform credit inquiries on my credit report?? Thanks; T.
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Bills.com
August 23, 2011
You ask a tough question. I did get some off the record information from an attorney, but please do not use this as legal advice, but only as a starting point for further research. Keep in mind that the answer to your question also depends on the jurisdiction in which you reside, as state law plays a large part in the equation.

It appears lawful to continue collection activity, even though the SOL has likely passed. It is just that the creditor can't use the court system to collect on the debt, if you raise the SOL as a defense.

Are you sure the inquiry is affecting your credit score? I believe it should be a 'soft pull,' which does not affect your score. Does the debt still show on your credit report? If so, contact he bureaus that report it and ask that:
  1. The delinquency be removed, as it is past the SOL and uncollectible.
  2. That the collection agency be blocked from further inquiries on that account number


That may or may not work, but it is worth a try.
Thanks for your feedback!
 
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