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

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 Bills.com Savings Center is a great resource to help you find this type of loan. Check out the loans section of the Bills.com 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 Bills.com 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 AnnualCreditReport.com.

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 Bills.com 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!

Best,

Bill

www.bills.com