Advice on collections notice on old debt

Frequently, banks sell charged-off accounts which they feel will be difficult to collect to debt purchasing companies for a small fraction of the amount owed on the account, simply to get the accounts off of their books and to create revenue from accounts.

These debt purchasing companies frequently resell the accounts they cannot collect to other debt purchasers for even less money. By the time an account is seventeen year old, as in your case, it is likely that the account has been sold and resold numerous times by various debt purchasing companies. In California, the statute of limitations for filing a lawsuit to collect on this type of debt is four years, meaning that a creditor to whom you own money must file a lawsuit against you within four years of the date of last activity on the account. Since this account is 17 years old, I do not think that you need to worry about a lawsuit being filed against you in an attempt to collect on this debt. However, if for some reason, this debt purchaser files a lawsuit against you, you should consult with an attorney who can help you file a response to the lawsuit asserting statute of limitations as an absolute defense. The judge should dismiss the case if the creditor cannot show that the statute of limitations has not expired.

By federal law, all debts must be removed from a credit report after seven years (US Code Title 15, §1681c) and bankruptcies after ten. Remember that 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. Credit bureaus interpret this as seven years from the date of charge-off, or approximately seven and a half years from the date you last made a payment on the account.

The fact that the account was sold to a debt purchaser does not entitle the new owner to report the account to the credit bureaus as a new account. To make sure that the purchaser has not listed this account on your credit reports, you should obtain copies of your reports from each of the three major U.S. credit bureaus -- Experian, Equifax, and TransUnion. You can obtain a free copy of you report from each the bureaus once every twelve months by visiting AnnualCreditReport.com.

If you find an this old account appearing on any of your credit reports, you may want to dispute the listing with the bureaus. See the Federal Trade Commission document FTC Facts for Consumers: How to Dispute Credit Report Errors for more information.

Once the credit bureaus receive your dispute letter, they will forward the dispute to the creditor so the creditor can either challenge the dispute or correct the inaccurate listing. If the creditor does not respond, as often happens with old accounts, the listings should be removed from your credit reports by the credit bureaus.

More often than not, debt purchasers that buy accounts as old as this account of yours have no legal grounds to collect on the accounts. Rather, they use harassment and intimidation to try to collect on these old accounts. If you are receiving calls from the collector, you should be able to stop the calls by sending a cease and desist (CandD) letter to the collector demanding that they stop calling you to collect on this debt. You can find a sample cease and desist letter by visiting Fairdebtfaircredit.com.

Assuming that the account is not appearing on your credit report, once you send a CandD letter, you will likely never hear from this collector, or the debt purchaser, again. If the collector continues to call you after you send the CandD letter, you may want to consult with a consumer rights attorney in your area to discuss the legal recourse available to you to stop the collection efforts on this old debt. You should be able to find an attorney who can assist you with this situation by contacting your local Bar Association's attorney referral service and explaining the legal problems you are facing.

I doubt that this old debt will cause you any major problems, as debt purchasers who buy these accounts generally give up their collection efforts once the consumer has demonstrated that he or she knows that the creditor has no legal recourse to collect on the debt. However, if you do have any problems with the collector, I wish you the best of luck in resolving them, and I hope that the information I have provided helps you Find. Learn. Save.

Best,

Bill

www.Bills.com