Of Statutes of Limitations and Debt Collection Agencies

Although debt collectors are known for their aggressive and often, illegal collection practices, consumers now have the upper hand with the Fair Debt Collection Practices Act or FDCPA enacted by the congress. Unfortunately, many debtors remain clueless when it comes to their rights as well as the concept of time-barred debts. This leaves many debtors vulnerable to debt collection harassment and is bullied into paying for debts when they don’t really need to.

Now, every debt can be collected until a specific date. Known as the statute of limitation, the length of time until the debt validity expiration will vary from state to state. Because each state’s statute of limitations will differ it is up to the debtor to determine how much time he or she have until the debt’s validity expires. If your debt is already out of statutes and you still get collection calls from debt collecting agencies, you need to know the limits imposed on such situation.

For example, although the debt is out of statutes, the debt collection agency can still make attempts to obtain payment. Attempting to collect out of statute debts is by no means, an illegal practice. However, debt collector’s efforts to do so is now limited. For instance, they can no longer threaten to file a credit card lawsuit. It’s common for many collectors to use a credit card lawsuit as way to scare delinquent debtors into paying the debt. On out of statute debts, they cannot file a credit card lawsuit even if they followed through with the threats because the debt is no longer valid for collection. If you have old, unpaid credit card debts that are on the verge of reaching out of statutes status, do not repay the debt because this will just restart the statutes clock!

Some debt collection companies go at great lengths to collect debts, including re-aging old, out of statutes credit accounts to buy them more time for collecting the money by filing a credit card lawsuit. This means if a debt is beyond the statutes of limitation in your state, they can fool you into paying by starting the statutes clock to file a credit card lawsuit. If you suspect that your debt has been re-aged, you can request a credit report from major credit reporting bureaus and examine the information on the report. If things do not add up to the information released by the debt collector pertaining to the old debt, take note of it, point it out and report the agency for re-aging your debt account. Do note that in some states, re-aging charged off accounts is legal as long as the debtors acknowledge that they own the debt.

Leave a Reply