Is this illegal for credit companies to do?

Question

Back in 2000, I lost my job and I ended up having my car reposessed. The money owed was on my credit as a negative for 7 years. It is set to roll off my credit this year. In the mail today, I received a letter stating that after 7 years, they have just now sent the money owed to a collections agency. Isn't this illegal? This seems to be a harassing technique set at purposely and maliciously marring a person's credit for longer than 7 years. Do I have any means of recourse, or because the first negative wasn't fully discharged off the credit, what they are doing is legal?

all help in this matter is greatly appreciated.

Answer 1

Unfortunately yes this is very legal.

Your debt does not magically expire in 7 years. It falls off the credit report. If the credit card company has a judgment against you (and chances are they do) they have the option of renewing the debt. Some debt collection agencies will purchase the debt and renew it before the time expires if they feel they have a chance to collect it. Now, they do purchase it for pennies on the dollar. Credit card companies sell them since it is better than nothing. Debt collectors (which I am) will hound you if they think you got it. Here is a list that will help you:
For many people, the cold call from the bill collector is an intimidating and even humiliating experience. They are unprepared to deal with collectors, who are trained to handle every type of response. Relentlessly assertive, collectors focus on "the close" -- your commitment to pay.
The less knowledgeable you are about your rights, the more confident a collector becomes; the more worried you are, the less concerned the collector becomes. Collectors know that it's easier to manipulate a conscientious debtor into a payment plan that benefits the collector, not the debtor.

You'll be in a better position to resist collectors' pressures, and negotiate a sensible repayment plan, if you're prepared for the tactics they're likely to use. Here, then, are ten of the best-kept collection secrets.

1. The More You Pay, the More They Earn
Collectors get commissions -- usually 30 to 50% -- on money they bring in, which often double or triple their salaries. This means they have a strong incentive to press for a big "down payment" from you, even if this deepens the cycle of debt.
Collectors hoping for a big commission may claim that the boss insists on a big down payment. In fact, blaming it on a mythical manager is designed to deflect your anger away from the collector.

2. Payment Deadlines Are Phony
Payment deadlines set by collectors are meaningless. Collectors simply want to create a sense of urgency, because the longer it takes to get you to pay, the less chance there is of collecting the debt.
3. They Don't Need a 'Financial Statement'
Collectors often claim they need a "financial statement" from you, so they can work out a realistic repayment plan. You'll notice, though, that the information they ask for -- bank account numbers, references, place of employment -- is far more than they need for that purpose. They're fishing for information that will help them find you if you move or sue you if you don't repay the debt.
4. The Threats Are Inflated
Collectors always graphically detail the disastrous consequences of failing to pay a debt. "Your credit rating will be ruined," they warn. (Not mentioning that it's probably already not so good, since a collection company is after you.) "Your personal possessions, including your car, could be seized and sold at a public auction!" (Never mind that this virtually never happens; it's illegal in some states and impractical because of the expense.) Probably 95% of the time, collectors go after only bank accounts and wages.
5. You Can Stop Their Calls
You have the right, under federal law, to tell a collection agency to stop contacting you. Just do it in writing, and contacts must stop, unless they're to tell you that collection efforts have ended or the agency is going to take a specific action (like filing a lawsuit) against you.
6. They Can Find Out How Much You Have in the Bank
A collector who has your bank account and social security numbers can probably easily find out the balance of the account. Because big banks now have automated account inquiry systems, the collector doesn't even have to speak to a human being; all it takes is a phone call to the automated voice-mail service. When the account number and social security numbers are punched in, the computer promptly supplies an up-to-the-minute account balance.
7. If You're Out of State, They're Out of Luck
Collection agencies routinely call out-of-state debtors to demand payment. But if a creditor has sued you and won, you are probably safe from enforcement action if you bank and work outside the state where the lawsuit was filed. That's because to collect, the collection agency must transfer the judgment to your state, which is prohibitively time-consuming and expensive.
8. They Can't Take It All
Certain income, such as social security, pensions and 75% of your take-home pay, is exempt from enforcement action. You can file a claim of exemption from a garnishment of the other 25% of your wages if it would cause you or your family severe hardship.
9. They May Not Know a Thing
Sometimes a collection agency lawyer, trying to collect a judgment debt, sends questions on a court form asking about your income and assets. (These are called "post-judgment interrogatories" or "information subpoenas.") This is good news for you -- it means that the agency has no information and is hoping you will be intimidated enough by this legal questionnaire to complete it. Many people do, because the forms list sanctions, such as fines, for not doing so. But normally, it is too expensive and time-consuming for an agency to go to court and force compliance.
10. You Can Pay Student Loans in Installments
If you are behind on student loans, you can apply for what every collection agency hates: "reasonable and affordable payments" under the 1992 Higher Education Act. If you can document financial hardship, a collection agency must accept as little as $10 per month for at least six months. As long as you make the payments, you are eligible for Title IV Student Aid, and you can continue the payments unless your circumstances change.

Look, you do owe the debt so I would talk to an attorney and make them an offer so this will go away. Trust me, I get paid pretty good money to hound people and I am good.

Good luck to you.

Answer 2

Depending on which state you live in, creditors of revolving credit accounts (like credit cards), have 3-8 years to collect a debt, from the time the account was closed.
After the statute period, the creditor no longer has the right to sue you, but, may still try harrass you into paying.
IMPORTANT: If you send even one cent, the statue starts all over again.
As far as credit reporting goes:
If the 7 years has elapsed, contact the credit bureaus and have the information removed. If they try to report it after 7 years, it may be fraud, and YOU could sue THEM.

Check the laws of your state.

Answer 3

Seven years is the limit for REPORTING the repossession on your credit report under US Federal law. That has nothing to do with COLLECTING the debt. Each state has its own statute of limitations for suing you over the debt. Even after the stature runs, you still owe the money, they just have no legally enforceable method of collecting. That said, everything a collection agency says is a lie. If they tell you "My name is Bob", you are probably talking to George. The ONLY job of a collector is to get you to send money. they DON'T CARE if you owe the money. You can send them a WRITTEN request not to contact you except to inform you of legal action (read a lawsuit). If they continue to call, you can sue them.

For anyone that says they have to accept "fill in the blank": PROVE IT. Besides a "No contact" order, I've never seen a legitimate source for any such claim.

Answer 4

You are "far" past the collecting SOL for a repo.
(If they had gotten a judgment against you for the repo - you would need to find collection SOL in your state for judgments)

Repo's fall under the UCC for a 4 year collecting SOL. The SOL for both collecting and reporting starts to run the day the vehicle was sold creating the deficiency. (which legally should be shortly after the repo)

Even though you are past the SOL for collecting, they can continue to try. They cannot legally sue for a time barred debt but that does not stop some collectors.

They cannot re-age the debt and place it back on your reports if it is past the reporting SOL.

Click on my profile and do some reading on the links I've provided - the FDCPA, FCRA, etc.

If they are not collecting on a judgment, just on the repo itself you might send the collection agency a SOL letter telling them the debt is no longer collectible
http://whychat.5u.com/nottoca.html