Collections On 12-Year-Old Debt

Collections On 12-Year-Old Debt
Mark Cappel
Mar 24, 2014
Key Takeaways:
  • 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.
  • Validate all debt, and especially 12-year-old debt.
We Receive Collection Calls On 12-Year-Old Debt. Can They Still Collect on Debt This Old?

My husband purchased a truck in 1995 and turned it in less than one month later. The account was turned over to several collection agencies. We obtained a home loan in 2003 and at that time, that delinquency was no longer on his credit report. We have had his credit checked several times since then and it remained off of his credit. Today, we received a bill from another collection agency on the outstanding balance from 1995. I thought that something only stayed on your credit report for 7-10 years. This thing still haunts us. Can they still make collection calls on 12-year-old debt?

It’s frustrating to receive collection calls on 12-year-old debt. Are collection calls on 12-year-old debt even legal?

How does a statute of limitations work regarding a debt that’s really old? Can 12-year-old debt appear on my credit report? Can a debt not appearing on your credit report be collected?

Read on, and we’ll answer your questions about collection calls on 12-year-old debt.

The Basics About Old Debt

Old debt never dies, except in two states. An original creditor, the original lender such as a credit card issuer, or a collection agent have the legal right to pester you about an old, unpaid debt forever. The exceptions are in Wisconsin and Mississippi. In those two states, a debt stops being collectible when the statute of limitations on the debt runs out.

Whether a debt appears on your credit report has no influence on a debt’s collectibility. An original creditor or collection agent is allowed to try to collect an old debt that does not appear on your credit report.

Let’s look at these rules a little more closely.

Statute of Limitations & 12-Year-Old Debt

Each state has its own statute of limitations rules. When it comes to debt collection, the rules that usually apply are for written contracts and open accounts. (See the resource Statute of Limitations Laws by State to learn your state’s laws.) Some states, like the Carolinas, have short statutes of limitations for written contracts — 3 years. Other states, like the states that begin with the letter "I", have long statutes of limitations — 10 years.

As mentioned, an original creditor or collection agent can contact you and ask for payment on a debt that’s of any age (excepting Wisconsin and Mississippi residents). So what’s a statute of limitations good for?

A statute of limitations is a defense you can use if an original creditor or collection agent files a lawsuit against you. Let’s say the statute of limitations that applies to your debt is 4 years. The original creditor files a lawsuit against you 4 years plus one day after the date you missed your last payment. You would answer the lawsuit with a motion reading something like, "Even if everything the creditor says is true, they filed their lawsuit after this state’s statute of limitations expired. Therefore, the lawsuit is time-barred, and I ask the court to dismiss this case." If the court believes the facts in your motion, it will dismiss the case.

In many cases, the statute of limitations rules are easy to apply. Statute of limitations issues get tricky when the creditor and consumer reside in states with different statutes of limitations rules. See the article How to Tell Which Statute of Limitations Applies to Your Situation to learn the five key questions lawyers ask when analyzing a statute of limitations issue.

It is a violation of the FDCPA for a collection agent to pursue a debt collection lawsuit against a consumer after the statute of limitation expired (Kimber v. Federal Financial Corp. 668 F.Supp. 1480 (1987) and Basile v. Blatt, Hasenmiller, Liebsker & Moore LLC, 632 F. Supp. 2d 842, 845 (2009)). Some collection agents still sue in hopes the consumer will not know this rule.

Credit Report Rules and Old Debt

In the credit report world, negative items on credit reports are called derogatories. Most derogatories can appear on your credit reports for up to 7½ years. The starting point is the date of first delinquency. In other words, the date of the first missed payment starts the clock. Making a payment or settling an account does not restart the 7-year clock.

Equifax, Experian, and TransUnion are the biggest publishers of credit reports. Each are independent, and each may publish different information in your credit reports. Equifax, Experian, and TransUnion must follow the federal Fair Credit Reporting Act (FCRA).

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. The FCRA 7-year rule is completely separate from state statutes of limitations for debt issues.

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). Equifax, Experian, and TransUnion report chapter 13s for 7 years
  • 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. Learn the lifespan of a judgment in your state at the Statute of Limitations Laws by State page.

The start of the 7-year period begins at the date of first delinquency. If no payments are made on the debt, the 7-year period begins 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 called "re-aging a debt" and 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 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.

Wisconsin and Mississippi outlaw lawsuits against consumers in cases where those state statutes of limitation have passed. Wisconsin and Mississippi are the only exceptions to the "lawsuits are allowed for original creditors even if the statute of limitations expired" rule.

Your Question: Collection Calls on 12-Year-Old Debt

When you receive collection calls on 12-year-old-debt, validate the debt. Follow the hyperlink just mentioned to learn quick and easy steps to validate debt. It’s worth your while to take this step for two reasons.

  1. If the collection agent cannot validate the debt, it cannot collect the debt.
  2. The older the debt the more unlikely it is the collection agent can validate the debt, according to the FTC. It is unlikely the original creditor will be able to give the collection agent any information to validate a 12-year-old debt.

You mentioned your state’s statute of limitations and this debt’s appearance on a credit report. As we mention above, just because a debt does not appear on a credit report does not mean your state’s statute of limitations clock has run out. Federal credit report laws and a state statute of limitations laws are separate and independent from each other.

If you have problems paying your credit card debts, consult with a debt resolution partner who can discuss your options.

Don't pay a debt simply because a collection agency contacts you. Do not make any payment on the debt before reviewing the situation carefully. Making a payment could reset the statute of limitations clock back to zero. If the clock is reset, the creditor may be tempted to take legal action against you without concern about a statute of limitations defense you offer.

A collection agency’s contacting you does not necessarily mean you are legally obligated to pay the debt. It also does not mean this 12-year-old account will reappear on your spouse’s credit report.

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. If your husband is sued for this debt, he very likely can use the statute of limitations as an affirmative defense 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.

A new company purchasing your account cannot lengthen the time the account appears on your credit report. Be careful, though, because unscrupulous collection agents change the date of last activity on old accounts so they appear on your credit report for longer than 7 years.

Pull your credit report and review the accounts in question to make sure you see no unauthorized changes. If you find any incorrect or suspicious information on your credit report, such as this 12-year-old debt reappearing on your credit report under a different name, dispute the listings with the credit bureaus.

Visit the credit resources page to learn more about credit, credit scoring, and credit reports.

For further information regarding options available to consumers struggling with debt, I invite you to visit the Debt Help page.

I hope the information I provided will help you Find. Learn. Save.



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CCoralSea Mercintile, May, 2014
I think, morally we should pay our debt, It it protects our country from falling into a recession, so we should definitely pay our debt.
BBill, May, 2014
A person can choose to pay a debt for moral reasons, even if the legal obligation has passed. There may be competing moral reasons not to pay a debt, too. Each person can make that choice, if faced with it.

I don't see the link to recession that you referenced. Usually, the default rate on personal loans is a result of macro-economic forces, and not the other way around.
KKeKe Maples, Apr, 2014
A GA company is calling for my mom about a loan from a bank in 2002. The loan wasn't from 2002, but earlier. She has been disabled since 1996 and hasn't worked since. She can't pay it back. What can I do to make them leave her alone? It's more than 12 years old.
BBill, Apr, 2014
Find the name of the company calling. See if it sent any written correspondence. Help your mom send it a cease communication letter. If they continue to call, consult with an attorney who specializes in Fair Debt Collection Practices Act (FDCPA) violations. Make sure she does not send a penny to the collector, as it could bring a debt that has passed the statute of limitations for debt to come back to life.
kkeonia maples, Apr, 2014
A company called AGA in California. They called all my family looking for her but have not called me? Seeing that I've been her care taker since 96. I've had the same phone number for ever. When I called he didn't even make sure he was talking to the right person. .He just gave out her personal information. How do i get them to stop calling my family?
BBill, Apr, 2014
I would assume the "her" you refer to is your mother or someone who you have power of attorney to handle their financial matters.

It would be helpful to know in which state the person in question resides, the type of debt AGA is collecting, and when the last payment was made on that account.

If the collection account is older than the statute of limitations in her state, then send the collection agent a cease communications notice.
EEmily, Mar, 2014
My husband received a call from a "Litigation Firm" on Friday about some debt I owed under my maiden name. I called them back immediately. Was told it was from Verizon from 2002 (12 years ago). I contacted Verizon, they had no debt on me. I contacted Verizon Resident this morning (MON) and they had an old debt for $45.59 from 2002. They said it was sold to a debt collector. I then attempted to trace this debt from collector to collector. The one who called me friday said they would be willing to settle this debt for $259.14, which is way above what Verizon had on file. They said that there would be Civil Suit brought upon me if I didn't pay right away. They gave me an old address of mine from 7 years ago said that had sent a letter there to collect this debt. I never received any letters. Can I be sued? The SOL in NH is 3 years. They said they can still sue. Do I have to pay for all these fee's associated? HELP!
BBill, Mar, 2014
Send a debt validation letter to the collection agent immediately. Just because you were able to find an old debt of yours from Verizon at about that time does not mean the collection agent will be able to validate the debt. Follow the hyperlink in the article above to the debt validation page.

You mentioned New Hampshire and its 3-year statute of limitations. If a collection agent files a lawsuit against you for this debt, consult with a New Hampshire lawyer immediately. Discuss filing a counter-suit against the collection agent for violating the Fair Debt Collection Practices Act, which prohibits collection agents from filing actions on time-barred debt. Because the statute of limitations clock has run out on this debt you have no legal obligation to pay it.

You mentioned the $200 or so in mystery fees. The FDCPA outlaws those, too, with one exception. If your contract with the original creditor (Verizon) allowed the addition of fees and interest in collections and your state law allows it, then collection agents may add mystery fees. Most collection agents do not receive the original contract the consumer signed. Therefore, they do not know if the contract allows additional fees. As a result, honest collection agents never add fees to their collection accounts -- they want to stay on the right side of the law. Unscrupulous collection agents cross their fingers and hope consumers don't know the FDCPA, and add fees willy nilly.

What to do? As mentioned, send the collection agent a debt validation letter that includes a cease communications demand. If the collection agent files a lawsuit against you, consult with a lawyer and count your lucky stars because you get to collect statutory damages from the collection agent.
HHope, Mar, 2014
I received a call from a carrier stating he has sealed documents to serve me and I need to make myself available between 12 and 5p tomorrow. If I require more information contact the arbitration service using the file number he left on my voicemail. I call the number and use the file number and the arbitration company informed me that I'm being sued by Citibank for a debt valid from 2001-2006. The final payment due at this time is over $5,000. This would all be fine but I don't remember the debt, the creditor doesn't have me in their database, nor do they show up on my credit report. Since then I've purchased a home and cars with no problem. My question is how do I move forward? Should I contact my lawyer? How should I deal with the carrier if he comes to my job or home as promised?
BBill, Mar, 2014
Everything you wrote sounds like a familiar scam: Call a consumer out of the blue with news of a vaguely legalistic sounding procedure that's just about to happen that, by golly, you can prevent by calling someone and agreeing to a settlement today. This must work often because we receive a steady stream of messages with facts like yours.

Legitimate process servers hired to deliver a lawsuit notice rarely call ahead to warn you they're on the way, and certainly don't have the chutzpah to tell you to when to be home so they know where to find you.

Assume this is a scam until proven otherwise. Call the number, and ask for the name of the collection agent — they may call themselves a law firm — their address, and the account number of the debt in your name. Promise them nothing. Send them a written debt validation notice. A scammer will be unable to validate the debt. A debt that cannot be validated cannot be collected.

The fact this account does or does not appear on your Equifax, Experian, or TransUnion credit reports has no significance legally. You might have no legal liability for a debt mistakenly on your credit report, and the opposite is also true.