Back in 2000 or 2001 I got a student credit account and due to financial hardship the account went to collection in 2003. From my understanding, this account is to be removed from my credit report after 7 years of it's first deliquent date not the date it was sent to collection. Now, in 2007 the collection company is contacting me and it is pass the California's Statue of Limitation and the 7 years mark. What should I do? What can the collection company do to me? Can this go back on my credit report even though it has been removed? Can someone please help I am confused about this whole credit report/credit collection/statue of limitation thing? Thanks. Your help and advise is greatly appreciated.
2007-09-18 07:12:09 · 32 answers · asked by sophath m 1 in Business & Finance ➔ Credit
The statute of limitations describes how long a company has to sue you to get the money back. However, it does not prevent them from contacting you after the time is up. If you are beyond the statute of limitations, they cannot take you to court. However, beware, there are ways around the statute of limitations. One is to "reset the clock". Sometimes, if you acknowledge the debt as yours then the company can set the time limit to zero. It all starts over again and they can sue you. Of course, this will probably depend on what state you live in. Another tactic is to hide the debt in the fine print of another debt. Basically, you take out a new loan or get a new credit card and somewhere in the super small words is a clause that says that any prior uncollected debt will be repaid with the new loan. This will reset the clock.
Now, there are laws about how creditors can contact you. If you tell them not to contact you again unless it is to notify you of court action, then the company is required to not contact you anymore. You may have to send them a certified letter to get this done properly. If they cannot sue you and they cannot contact you then their hands are tied. This will not prevent them from selling the debt to another company that can start contacting you though.
What you have is something called zombie debt. It is very old debt and is usually considered uncollectible. The collection companies can purchase these debts very cheaply. Therefore, if they get even a small percentage of people to pay up a small portion on these debts, they will make a profit. Technically, you still owe the debt. However, there is not much these guys can do to collect it.
Here is an article that MSN money did on it.
http://articles.moneycentral.msn.com/SavingandDebt/ManageDebt/ZombieDebtCollectorsDigUpYourOldMistakes.aspx
Looking over some of the other posts, I have noticed some stuff that needs comment. A few people have said, pay your debts. They of course do not know that your story is. You may have been the victim of a stolen identity. You may have had a tragedy that caused you to incur too much debt. Also, they do not know how your life has been after you had a black mark on your credit. You may have been turned down for jobs or places to live. You have probably paid that debt by virtue of suffering.
Next up, someone said that the people will take it from your family. That is true only if the family appears on the debt. If it is in your name, then legally, you are the only one required to pay. Some debt collection companies try to contact family and friends and tell them that they are supposed to pay. However, this is not legal at all. Not in any of states in the US. You can definately sue any company that tries this.
Also, don't feel sorry for this company. They probably bought your debt for less than a dollar. They are not out much if you don't pay. They also knew how risky it is to try to collect old debt. This is a highly risky venture that fails more often than succeeds. It is also a very lucrative venture when it succeeds though. That is why these guys do it.
Another area of error is people telling you that the statute resets is the debt is sold to another company. That is 100% false. If that were true, then why have a statute of limitations in the first place? All companies would just sell the debt back and forth and the whole thing becomes moot. There are ways for the statute to be reset, however, the company selling the debt is not one of them. If anyone tells you this, then ask them the part of the California legal code has this little gem. I bet they cannot find it for you.
2007-09-18 07:27:35 · answer #1 · answered by A.Mercer 7 · 7⤊ 2⤋
Debt Collection After 7 Years
2016-11-07 23:28:58 · answer #2 · answered by tegtmeier 4 · 0⤊ 0⤋
Yes and No - Depends on how they went about it from the start. If they got a judgement on you it can remain on your credit report for up to 7 years. After the 7 years this should come off unless they take it back to court and have it re-uped which will add another 7 years and they can do this forever. It sounds as tho they already have a judgement because this would be necessary for garnishment. I do not know how much the bill is for but it is probably in 3rd part collections and they will always settle for a lesser amount. Usually can get them down to about 50%. If you called said you were unemployed(If you were of course) and you could borrow the money but that is all that ?? (mom and dad) would loan... You get the picture.... Good luck
2016-03-13 04:47:27 · answer #3 · answered by Anonymous · 0⤊ 0⤋
I do believe that the debt is still legal, you still owe the money even though it might not show on your credit report. You are still liable for the debt that you owe. As for how the credit agency can report this, I don't know if they can add the amount back to your credit report. I really dont see why they can't, because the collection agency has bought this debt, and it is a new account to them. They are not collecting as the original company, this is a new account. See the FCC website for information on dealing with Collection agencies.
2007-09-18 07:20:30 · answer #4 · answered by C M 3 · 0⤊ 0⤋
No, it can not go back on your credit report.
Just remember that The Statute of Limitations does not cause your debt to disappear after it has expires. If a creditor files a civil lawsuit, the person has an absolute defense to use against the creditor in court. They must present the new evidence in the court to avoid a potential judgment. You file the proper papers to the court to support the claim of a absolute defense. If the creditor tries to sue ,in a court of law and you do not prove to the court that the Statute of Limitations has expired, then you will have automatically lost lawsuit and a judgment will be issued against you.
If you are contacted by a creditor and the debt expired under the Statute Of Limitations:
The only thing you need to say to the collector is, "I have an absolute defense because under the Statute of Limitations, the debt has expired."
2007-09-18 08:44:42 · answer #5 · answered by Anonymous · 1⤊ 0⤋
The 7 years kicks in from the date it went into collections as collections is a legal proceeding, so actually it will not come off credit report until 2010 even if paid off. The collection has up until then to collect on its funds. My advice since you are already 4 years in if you can not pay it and the collection company is not hounding you let it go you alreday had the bad mark on your record it is going to stay there even if it is shown to have been paid off.
2007-09-18 07:19:01 · answer #6 · answered by Derek O 3 · 1⤊ 1⤋
They can try and collect on it for as long as they want. Because they have reached and passed the 4 year mark on the statue of limitations they can no longer go after you in court for a judgement. However, they can still call you and harass you about paying them. If they choose to sell your account to a different company, even though it has been 7 years....another company can put it back on your credit report as a delinquent account.
My advice.....pay it off. You charged on it, pay it.
2007-09-18 07:18:34 · answer #7 · answered by Heather B 5 · 1⤊ 1⤋
As long as you are admitting the debt to the people on the phone they will keep the debt active. On your record. With the new bankruptcy laws, it's gotten easier for any agency to buy out your debt from other agencies, no matter how old the debt is, and chase you for payment. It may go agaisnt California laws, but if the agency that bought out your debt is based in New York, and they have sucessfully contacted you, and you have said yes, it's you and your debt, they will take all means available to secure any money that they can get from you.
2007-09-18 07:21:12 · answer #8 · answered by Carol T 4 · 0⤊ 0⤋
The 7 years woul be up in 2010. Since your account went to collections 2003.
2007-09-18 07:16:59 · answer #9 · answered by ramblin guy 4 · 0⤊ 2⤋
This a new market for business's they buy old accounts that have never been paid and try to collect off of them.
so,i yes,they had a big story on it in USA TODAY.The companies are literally making tons doing this.because people assume after 7 yrs it gone in all actuaity its not.
Another company had purchased all the odl accounts and trying to collect them.
2007-09-18 07:18:21 · answer #10 · answered by hugsandhissyfits 7 · 0⤊ 0⤋