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What you can do with old credit card debt that's been sold

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Mark Cappel
UpdatedMay 20, 2024

I have some old unpaid debts, who would give a loan to someone with terrible credit?

I'm 28 and have outstanding credit card debt from 8 years ago that has been sold and sold to various collection agencies. There's no way I can pay them off. It's probably only $10,000 total but when I try to work with an agency, they want a lump sum payment before they will even set up a payment program. What options do I have? I would love to have them all in one monthly payment even if it takes a while to pay it back. Who would give a loan to someone with terrible credit? Thanks for your help!

You could look into a personal loan to consolidate your old debt - or you can try to settle your debts for a discount.

Very quickly, if you want a free debt consultation with one of Bill's approved debt help partners, click here: Debt Help.

If you choose to go the loan route, your ability to qualify for a personal loan greatly depends on your credit score. If your credit is less than perfect, and you own a home, a secured debt consolidation loan may be right for you. The interest rates are certainly lower than unsecured loans or credit cards, but be careful before you borrow money against your home to pay off old credit card debt; you would be converting what was previously unsecured debt into secured debt. This could cause you problems down the road if for some reason you are unable to make your payments, or if life circumstances force you to file bankruptcy, as you may not be able to discharge the secured debt as you would unsecured debt.

However, secured debt consolidation loans work for many people, so this is an option to consider carefully. Again, the Savings Center is a great resource to help you find this type of loan. Check out the loans section of the Savings Center for unsecured debt consolidation loans that may fit your needs.

In case neither of the options stated above are feasible for you, let me give you some information on old debt such as yours.

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. All states have a body of statutes in their codes of law called, "Limitations of Actions," commonly referred to as the statutes of limitations. The idea behind these laws is that we as a society have decided that we don't want old debts hanging around forever-- we want people and businesses to be able to move on with their lives without worrying about being sued. The length of time a creditor has to sue you depends on your state of residence and the type of debt. For example, many states allow longer for creditors to file suit to collect on closed ended consumer loans than on credit card debts. Most states give credit card issuers 3 to 4 years to file suit after default, but some states allow as many as 10 years. Check out the State Consumer Protection Laws and Exemptions page. This site has more information about statutes of limitations and a list of limitations by state. If a creditor files a lawsuit after the allowed time, the court will usually throw the case out and not allow the creditor to file suit again (called dismissed with prejudice). However, you must raise the issue of expired statute of limitations in a written response to the lawsuit, or else the court will not know that the statute of limitations has expired.

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.

Under federal law, accounts must be removed from your credit report 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

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 letter to the collector demanding that they stop calling you to collect on this debt. You can find a sample cease and desist letter at the Debt Self-Help Center.

Assuming that the account is not appearing on your credit report, once you send a cease and desist 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 cease and desist 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.

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. I wish you the best of luck in resolving the situation, and I hope that the information I have provided helps you Find. Learn. Save!



Debt statistics

Mortgages, credit cards, student loans, personal loans, and auto loans are common types of debts. According to the NY Federal Reserve total household debt as of Q4 2023 was $17.503 trillion. Housing debt totaled $12.612 trillion and non-housing debt was $4.891 trillion.

A significant percentage of people in the US are struggling with monthly payments and about 26% of households in the United States have debt in collections. According to data gathered by from a sample of credit reports, the median debt in collections is $1,739. Credit card debt is prevalent and 3% have delinquent or derogatory card debt. The median debt in collections is $422.

Collection and delinquency rates vary by state. For example, in Hawaii, 11% have student loan debt. Of those holding student loan debt, 7% are in default. Auto/retail loan delinquency rate is 3%.

To maintain an excellent credit score it is vital to make timely payments. However, there are many circumstances that lead to late payments or debt in collections. The good news is that there are a lot of ways to deal with debt including debt consolidation and debt relief solutions.



BBill, Feb, 2010
I assume you contacted the last owner of your collection account and asked it who your account was sold to. There is no sure-fire way of determining the ownership of a collection account. The best way is what you did -- pull your credit report. Unfortunately, a credit report is an inaccurate snapshot of your financial picture from 30-90 days in the past. Wait another 30 days and pull another credit report and see if the account in question now has an owner.
tthomas houchin, Feb, 2010
How do I find out who owns a debt after it has been sold to another firm? I pulled a credit report and the account that is in question just shows that the account is closed. I am considering a chapter 7 and want to include all debt when I do this.