When I was 18 I got a credit card and went over the limit and owed $1000. I never paid it back and it was even dropped from my credit report. All of the sudden I get a letter from a collection agency saying that they brought my debt and that I owed $2,300. Is it legal for them to buy my debt and do I still need to pay the money back? I currently have nothing on my credit report which I checked 6 months ago. What should I do?
2006-12-21 08:53:33 · 10 answers · asked by Baby J 1 in Business & Finance ➔ Credit
Shorty needs to do some research before answering questions here....
Start by looking at the link I supplied below. Every state has a "statute of limitations" in which after a certain amount of time has passed, you no longer have a legal obligation to pay the debt. The creditor/collection agent must file a lawsuit before this time runs out, or they are out of luck.
So why would a collection agent spend money buying an account they can't collect on? Because they are counting on the fact that most consumers do not know the law, and don't understand their rights. They are gambling on it, and many times they scare the debtor into actually paying the debt.
Just because the SOL has run out does not prevent a collector from attempting to collect a debt. They just no longer have a legal way to collect..they can't sue you. But they can harass you! But you can put a quick stop to that by sending them a "cease and desist" letter. Once they get it, if they continue to bother you they risk a $1000 lawsuit from you for violating the FDCA laws.
So read the links below, know your rights, and tell the collection agent to buzz off!
2006-12-21 09:20:59 · answer #1 · answered by Anonymous · 1⤊ 0⤋
Never pay a collection agency full price . Start by offering them 12 cents on the dollar. Who are they kidding 2,000 really now that is a joke. You do have the right to tell them you will only work with the original creditor but that may be just another can of worms. As for the IRS. If you settle with the collectors then there is a simple form you will need to get from your tax person that provides a loop hole in the law and your debt will not be seen as a taxable bonus! I really hope you do not allow the collection company to bully you. What ever you do before you exchange any monies get everything faxed to you in writing!
Kourtnie Donihoo
The EDA Group
1 866 605.0753
www.enhanceddebt.com
"My sunshine doesn't come from the skies; it comes
from the love in my dog's eyes." -Unknown
2006-12-21 12:24:13 · answer #2 · answered by Kourtnie D 4 · 0⤊ 0⤋
The short answer is yes, the long answer is no. Yes you do still own the money and if they are willing to pay for your debt, they can buy it.
However......
It is unlikely that the debt will be collectible. The laws vary from jurisdiction to jurisdiction, but in all U.S. jurisdictions you have a limited time within which to press your claim in court. Not having done so after all this time, the claim is probably dead. One warning here, don't pay anything on this debt, do not sign anything and I probably wouldn't even talk to them until I had consulted with my attorney. If you acknowledge this debt, you run the risk of reinstating it.
Additionally, under the Fair Credit Reporting Act. Derogatory information can stay on your credit report for only 7 years after the date of first delinquency. Collection agencies will frequently try to restart the clock by mis-reporting the date of first delinquency, but this is illegal. Here again, don't pay anything on this debt, otherwise you will have created a new date of first delinquency. That is something you definitely do not want to do.
Good Luck
2006-12-21 11:43:32 · answer #3 · answered by superschupp 3 · 0⤊ 0⤋
Yeah its legal. But your account is past the statue of limitations, the range varies from state to state i live in Michigan and it is 6years and 9 mons. They can try to collect on you however, but they cannot purse anything more than that ie; garnish wages, put liens on property, or take any other form of legal action. You can call them and tell them to cease communication and by law they have to stop calling and sending letters. If they do it is illegal, and you can press charges for harassment. hope this helps!
Oh and if you or anyone else needs help w/ a collection company or their harrasment. look up the FDCPA on the internet, (Fair Debt Collections Practices Act) it is a debt collectors bible, you can get a much better grasp on thigs that way!
2006-12-21 11:47:43 · answer #4 · answered by *STAR* 3 · 0⤊ 0⤋
Do not pay this debt. This is the newest way for collection agencies to make money. It is legal for them to try to do this but you are under no obligation to pay this old debt. If you agree to do so or make any payments, the statute of limitations is null and void and the new date is issued. By the way, you never have to deal with collection agencies. All you have to do is send them a letter stating that your debt is with "___" and that they are hereby notified that they can no longer contact you in any way, shape, or form. Send it certified requiring a signature. After that, if they contact you, you can go after them for harrassment.
2006-12-21 09:29:38 · answer #5 · answered by ginabgood1 5 · 1⤊ 0⤋
Yes this is legal. It is in your cardholder agreement. The good news is that you have many protections through the Fair Debt Collection Practices Act.
You are technically responsible for collector's fees and any other fees that are listed in your cardholder agreement.
You can settle for less than you owe, but you have to pay taxes on forgiven debt. The IRS treats it like a bonus.
2006-12-21 09:08:31 · answer #6 · answered by Anonymous · 0⤊ 0⤋
LMAO I doubt it..... like the intelligent guy said every state has a statute of limitations regarding debt collections and 12 years seems like a really long time. Just don't respond to them untill you find out what it is in you state.
2006-12-21 09:27:34 · answer #7 · answered by Michel D 2 · 0⤊ 0⤋
yes they do, in fact they will buy it for a penny on the dollar. The original company probably wrote it off already and this company bought it because they figured they will try to get some money out of you for it. Just tell them you filed bankruptcy years ago and this was written off and if they keep bothering you, you'll have your lawyer contact them regarding harrassment.
2006-12-21 08:58:26 · answer #8 · answered by Shorty 2 · 0⤊ 0⤋
Of course they can but don't pay it. It has been too long and they wouldn't even be able to tell you what the charges were even for. From what I understand they just sell it off to another company if they can't get anything out of you. So really just ignore it.
2006-12-21 10:46:00 · answer #9 · answered by Chillin-it 7 · 0⤊ 0⤋
it's actually called "junk debt"......can be bought and sold but may be past the statute of limitations or be a balance left over from an earlier settlement in some cases.
2006-12-21 15:09:03 · answer #10 · answered by Anonymous · 0⤊ 0⤋