Did you recently get a call from a debt collector regarding an old debt? If you did, then you might be curious on how long can these debt collectors chase your for an outstanding debt.
Companies like Alamo Associates claim to be able to solve your problems and keep the debt collectors away by consolidating your debt into a new low interest loan.
It is hard to answer this question in a few lines, and it depends on the statute of limitations on debt that is prevalent in your state. When this limit is crossed, debt collectors lose the right to sue you for a repayment. However, this is not something that prevents them from contacting you to pay your old debts.
How Do the Statute of Limitations Work for an Old Debt?
Depending on your state, the statute of limitations can stretch from 3 years to 15 years. However, don’t think that you are always free from any damage. For example, credit card companies are sometimes successful in arguing that their state’s limitations should be followed, instead of yours. If you’re unsure about this, you should consider consulting with a bankruptcy attorney or a consumer protection lawyer.
What Does the Law Say About This?
Legally speaking, debt collectors can chase you indefinitely. Debt collectors can keep pushing you to pay back old debts for a long time. Consumer protection attorneys regularly run into customers who are being hounded by debt collectors for loans that date back as far as 21 years.
The debt is referred to as “time-barred” if the statute of limitations has been expired. The reason debt collectors have became so persistent is that, according to attorneys, lenders contact third-party debt collection services. These agencies are sold off the debt for pennies on the dollar.
When you are sued in the court for an old debt, in which the statute of limitations has been expired, you need to establish that the debt is old enough to be discarded. However, make sure that you don’t miss out on the court hearing just because you think that you are free from any legal mess. This is because sometimes, in the absence of borrower, a judge can rule in favor of the debt collecting agency.
What If a Debt Collector Pursues You for an Old Debt After the Expiration of Statute of Limitations?
If you receive a call from a debt collector who asks you to pay an old debt, particularly after the expiration date of statute of limitations on the debt, avoid acknowledging any debt and refrain from paying any amount. This is a rational course of action due to the following reasons:
- Often, old debts go from one debt collection agency to another. During this transfer of information, mistakes are bound to occur. This means that you might get a call regarding a debt which is owed by another person. Usually, this happens when two people have something in common like their contact number or similar names.
- Sometimes, when you acknowledge the debt, your statute of limitations is reset.
- Conmen don’t only exist in movies. It is possible that your caller is a scam artist. Fake debt collectors often manage to deceive others into paying money.
This is why the Federal Trade Commission has clearly advised against discussing debts with collectors, unless you get a validation notice. After contacting you over an old debt, a debt collector is required to send a written notice to you within the next five days. This notice must mention the name of the original creditor along with the exact debt amount. It also contains the rights granted to you under the federal Fair Debt Collection Practices Act. Moreover, you can also send a debt verification letter which can:
- Dispute the debt
- Have the debt collector provide evidence that you owed a debt while the statute of limitations remains open.
Is It a Good Idea to Pay an Old Debt When the Statute of Limitations Is Expired?
There are some people who believe that since there is no legal standing of a debt with expired statute of limitations, you don’t need to pay. On the other hand, some opine that as a moral obligation, you should pay any of your outstanding debts.
If you are worried about your credit report, then keep do note that after a period of seven years, any unpaid debt is not mentioned in your credit report. In case it is still there, you can contact the credit bureaus and tell them to delete it from your credit history.
What to Do If Your Credit Card Debt Is Still Active?
Those who owe an old credit debt that falls into the statute of limitations should know that it is important to pay it off. You can also transfer your old debt to a balance transfer card. In this way, the interest-free grace period of your credit card can allow you to pay on the balance.
It is critical to learn about your rights that are specified in the Fair Debt Collection Practices Act. FTC states that debt collectors are not allowed to call before 8am or after 9pm. Additionally, they can’t contact your workplace, if you have told them either in writing or verbally that such calls are not welcomed in your workplace, then they can’t call you. Remember, even if you owe debt, no one is entitled to harass you.
Final Thoughts
Debt collectors never really stop pursuing you, even when your debt’s statute of limitations is expired. In case a debt collector calls you for an old debt for which the statute of limitations have passed, avoid acknowledging it. Wait some days to see if you get a debt validation notice, after which you can write a verification letter to them for evidence regarding the association of that debt with you and whether the statute of limitation applies.
