- Start by learning the statute of limitations for debt issues in your state.
- Learn your state's collection laws.
- Consult with a lawyer if you have specific questions.
Can creditors try to collect a debt that is 13 years old?
Thirteen years ago, I purchased a dinning room set for $1,300 and paid by check. I was married and working, and never really balanced my checking account. Today I received a letter with a copy of my check and they say they failed to cash my check and now want the money. I am now 72 years old and on Social Security, and do not have the money. Do they have a legal claim after 13 years?
I would be surprised if the lender has a legal claim to enforce the purchase agreement you entered into when you bought your dining room set 13 years ago. Every state has a statute of limitations which limits the amount of time during which a creditor can file a lawsuit against a debtor to enforce an unpaid obligation. For example, California law gives creditors four years to sue for the enforcement of a debt; only a couple of states, Ohio and Kentucky, have a statute of limitations longer than 13 years. Therefore, the company trying to collect on this old debt probably has little ability to legally force you to pay the check it failed to cash 13 years ago. Read this Bills.com resource to learn more about statute of limitations for debt.
Even if this creditor somehow were able to proceed with a lawsuit and obtain a judgment against you for this old debt, it would likely be difficult for the creditor to enforce its judgment. Like most other forms of retirement income, Social Security benefits are generally exempt from garnishment by judgment creditors, so there is little chance that the creditor could force you to pay it from your limited income. Given the age of this debt and your limited income, I think it highly unlikely that this creditor will continue trying to collect this debt. However, if you begin receiving collection calls, you can send a cease and desist letter to the creditor, which should help stop the calls.
You may wish to respond to the letter you received, stating that the statute of limitations for the enforcement of this contract has expired, and that the collector must cease all collection activity. In addition, you may want to detail your financial situation, explaining the fact that in the thirteen years that have passed since this transaction was originally conducted, you have retired and are living on a small social security benefit, and thus are unable to pay even if you were liable for the debt. You may wish to consult with an attorney about this matter and have him/her respond to the collector on your behalf. Given your age and limited income, you may qualify for low-cost or even free legal representation through your local Legal Aid office. Your state or county bar association should be able to advise you of available low-cost legal resources for seniors in your area.
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In all, I think that you have little to worry about in this situation. The debt is almost certainly past the statute of limitations, and even if it were not, your income is likely exempt from garnishment. You should probably reply to the letter and then put this out of your mind, as you will likely never hear from this creditor again. I wish you the best of luck in resolving this claim, and hope that the information I have provided helps you Find. Learn. Save.
Dealing with debt
If you are struggling with debt, you are not alone. According to the NY Federal Reserve total household debt as of Quarter Q4 2023 was $17.503 trillion. Student loan debt was $1.601 trillion and credit card debt was $1.129 trillion.
According to data gathered by Urban.org from a sample of credit reports, about 26% of people in the US have some kind of debt in collections. The median debt in collections is $1,739. Student loans and auto loans are common types of debt. Of people holding student debt, approximately 8% had student loans in collections. The national Auto/Retail debt delinquency rate was 4%.
Each state has its rate of delinquency and share of debts in collections. For example, in South Carolina credit card delinquency rate was 4%, and the median credit card debt was $402.
While many households can comfortably pay off their debt, it is clear that many people are struggling with debt. Make sure that you analyze your situation and find the best debt payoff solutions to match your situation.