can a debt collector put a 13yr old debt back on our credit report?

Question

13 yrs ago we bought a car, barely had it a year before they repossessed it. it was reported on our credit report for 7 yrs and had since been deleted. all of a sudden, out of the blue, now that we are trying to buy a house, we get a collection letter for this 13 yr old debt. it is $3,000 and we have never had that kind of money to repay that debt and still don't. can they re-instate this debt on our credit report if we do or don't respond in the 30 days? it isn't right!

Answer 1

Junk debt buyers and collection agencies love it when people mortgage shop. They will come out of the woodwork to throw old debts in peoples way hoping that they will pay so it won't affect their chances of getting a mortgage.

And if the debt is outside the collecting SOL but still within the reporting they will not hesitate to immediately throw it on a persons report since the mortgage company would require that it be paid.

If this has been as long as you say, you are far past both the collecting and reporting SOL.
I'm sure that the collection agency realizes that or else they probably would have already placed it on your reports. They are just using the scare tactic hoping you will go for it thinking that it may harm your chances on getting the mortgage.

They cannot legally re-age the debt and place it on your report if it is past the legal 7 year period. If they do, you have the legal right to sue them in small claims and your gain would be up to $1000

The reporting and SOL for a repo is 7 years from the date the vehicle was sold creating the deficiency.
The collecting SOL is 4 years from the date the vehicle was sold creating the deficiency.

A repo voids the original contract, so that means the collecting statutes no longer fall under the written contract. It falls under the UCC instead.

Don't ignore the situation. For the simple reason that if they receive no response they may feel that you do not know your rights - and because of that it may end up on your reports.

Plus, they may risk being sued, $1000 is chicken feed to them. They purchase those old debts for literally pennies and make massive profits off of them when people pay.

Send them a SOL letter - make it known to them that not only you know your rights, but also the debt is far past the collecting SOL and to take a hike.
http://whychat.5u.com/nottoca.html

If you have any questions on how to use the letter go to the following link and ask in the credit forum
http://www.creditboards.com/forums/

edit++++

aww shucks Studly, thanks. You're a darn "smart cookie" yourself. :)
I hope you had a nice "vacation". Your straight forward, no holds barred answers have been missed.
As for the repo SOL statutes, you (and the OP) might check out Article 2 (§ 2-725) of the UCC
http://www.law.cornell.edu/ucc/2/article2.htm#s2-725
There is also case law citing 4 year SOL under the UCC in Ford Motor Credit v. Gilberto Arce

Answer 2

Do not respond to the letter. The bank that had the original auto loan has already charged it off on their corporate taxes. Collection agencies often buy these charge-offs for pennies on the dollar and then try and collect. They figure consumers don't know any better and that they will pay. In fact, if you do decide to pay the collection agency, your credt will be hurt as the account will become current and show it is past due. To make matters worse, the collection agency may be completely bogus and NOT report the bill as being paid anyway. So you have given them free money. Nice scam, huh?

I had a credit card while in college (about 15 years ago), that went into collection. I eventually settled with the collection agency and the account has since dropped off my credit report (it takes about 7 years). Recently I have received letters from another collection company about this same account. They are asking for a portion of the original balance. I am not responding. You shouldn't either but do check out your credit report and make sure the new agency isn't showing up.

Answer 3

Thank goodness I have Echo to fall back on when I take a "vacation" from here. ;)

I'm not sure of her interpretation of the SOL laws regarding repo's....better do some research because Echo is a smart cookie and don't make many mistakes in her answer.

But for now, lets concentrate on the credit reporting problem. The law is very clear on the reporting time of a debt....7 years, starting on the date of the delinquency. You can safely ignore the other nonsense about when the repo took place or other technicalities. It's clearly worded in the FCRA.

Therefore, it's obvious the collection agent is in violation of the law. Send him a certified letter, return receipt stating the following:

1) The reporting date has expired, and can no longer legally be listed on your report.

2) By changing the delinquency date, they have also violated additional portions of the FCRA laws that could multiply their penalties.

3) If it's not removed from your credit report within 30 days you will sue them in Small Claims Colurt (very easy to do).

4) Include wording to "cease and desist" any further communications with you. If they contact you again, they are now in violation of the Fair Debt Collections act, and can be sued for an additional $1000.

I also think that you are safely out of the SOL on this. Send this letter and I think you will find the problem will go away.

Contact me if you need further assistance.

Answer 4

As long as it is an open debt, I believe it can stay on your credit report indefinitely. If you paid it off 10 years ago and they suddenly started reporting you delinquent, that would be different. You can always write a letter of explanation to a mortgage company but if you haven't made any attempts to erase the debt, it is not going to look good. You should get in touch with the collection agency and work something out. You may not have $3000 but they are probably willing to settle considering the age of the debt. Also, they may be willing to set up a payment plan without interest. If you can't pay off $500 a month for half a year, you would probably not get approved for a mortgage anyway. Yeah, the credit system does suck. Good luck.

Answer 5

Do not respond. Go and find out what the statute of limitations is for this kind of debt in your State. I can not believe it would be over 7-8 years.

Answer 6

I believe they can continue a bad debt until it is paid. The seven year mark is for bankruptcies, but generally they can report a debt as unpaid, until it is paid. Once it is paid, it is usually removed between 7 and 10 years after payment.

Answer 7

I think this varies from country to country, but up in Canada, the answer is NO. Check the legalities of it from where you are. This may simply be a scare tactic.