How long after chargeoff can a collection agency collect on a debt? Is there a statute of limitations?

Question

Department store card was charged off in 1999, debt was sold to agency #1, who sold it to agency #2. Today I'm getting a call from Agency #3 who says there is no time limit to collecting a bad debt. I say he's wrong.

Answer 1

Like the other posters said, there is a time limit where they can legally collect.
But with that being said, they can continue to call or write to you for payment unless you inform them that the account is past the legal collecting SOL (if it is) or if you request validation, especially before the first 30 days expires from their first contact.

While it is illegal for them to file suit on a time barred debt, that does not stop them from filing. It would be up to you to use a SOL defense if you are past the collecting SOL when they file suit.

I would not recommend simply sending a cease and desist letter as that will not protect you in keeping them from suing you if they are planning on doing that.

You might consider sending them a SOL letter if you are past the legal collecting SOL for your state.
You should also check your credit reports to make sure they have not listed the account since it would be past the reporting period if it has been since 1999.

You might click on my profile and do some reading in the links I have listed - for the FDCPA, to learn your states collecting SOL and especially the last link to find sample letter templates for a SOL letter if you are out of SOL or for validation letters if you are still within SOL.

Answer 2

Ok, depends on the state but there is a statue of limitations on how long they have to sue you to get the money. Beyond that, they cannot sue you to get the money. However, they can still contact you. There are federal rules that say that you can tell a collection agency to not contact you again unless they are suing you. So if you are beyond the statute of limitations and tell them to not contact you then technically they can never collect.

There are problems with that scenario though. You can tell them to not contact you but then they turn around and sell the debt to another company. That company can contact you and you can tell them to leave you alone. They will sell the debt and the cycle continues.

Also, there are ways to reset the statute of limitations. If you make any attempt to pay the debt or accept that you owe the debt then the statute can be reset and they can take you to court. Debt collectors know a few different ways to get you to do this. Be careful. In fact, it is best to not talk with a debt collector if they call. Don't sit back and think that you are smarter than they are because they do this every single day for a living. It is way to easy to trip up and admit you owe the debt.

You should do some research on debt collection laws and also something called "zombie debt". There is a lot you need to know about.

Cookiesmom is correct, cancellation of debt can be considered to be income by the IRS and you would have to pay taxes on it.

Answer 3

If the now defunct hospital sold your debt to a collection agency, then the collection agency has a legal right to attempt to collect the debt. They also have the legal right to assess interest while the debt is unpaid. That's the law. I don't know how long it's been since you incurred this debt, but if the hospital is no longer in business, who is going to file the claim now with your insurance company? You should have followed up on this when you first knew the bill was not paid. Waiting this long may preclude you from any resources the insurance company would otherwise have offered. If the collection agency bought a legitimate debt, then the credit reporting agency isn't going to remove it from your credit report no matter what you do unless you can work out an agreement with the collection agency to remove it in consideration of paying the debt. If you do that, be sure to get the agreement in writing because collection agencies are known to tell a debtor any lie they can to get their money.

Answer 4

I say YOU'RE wrong. The statute of limitations only applies to being able to seek a civil judgment to collect a past due debt. If the debtor turns the account over for collection, they can try to collect it until the day you die.

Answer 5

basically what has happened here is the agencies bought your debt and now they are trying to collect their money...however per new IRS rules if you have cancellation of debt the cancelling agency can issue you a form 1099C and you have to report that money as income, but only after it has a final cancellation on it and yes it is reported to IRS

Answer 6

I looked all over the internet and came upon a bunch of scams. However this site did it for me= loandirectory.info-

RE How long after chargeoff can a collection agency collect on a debt? Is there a statute of limitations?

Department store card was charged off in 1999, debt was sold to agency #1, who sold it to agency #2. Today I'm getting a call from Agency #3 who says there is no time limit to collecting a bad debt. I say he's wrong.

Answer 7

Does anyone answering here know how to get these taken off your credit report once they have pasted the SOL?

I tried to call a credit agency & can't talk to a human - they ask me a "reference" number.

Answer 8

It depends upon what state you live in. Not all states have the same Statute Of Limitations.