Debt collectors have a finite window within which they can pursue legal action to induce payment of an obligation. The exact time period varies from state to state, as well as by the type of debt. However, a debt collector cannot sue you to collect a time-barred debt.
Now, with that said, the clock starts running again if a collector can get you to acknowledge responsibility for the debt, whether verbally or by getting you to send any payment at all toward it. This is why it’s important to understand what to do if you’re contacted about an old debt.
Zombie Debt
This type of debt is known as zombie debt because it can come back to life if you’re not careful when someone comes after you about it. There are individuals out there who buy up old debts from banks and credit card companies for next-to-nothing to use as bait to go fishing for dollars.
These people are well aware your obligations regarding the debt have passed, particularly if it’s old enough to have also dropped off of your credit history. However, they also know some people can be frightened into paying up just the same.
And, that’s exactly what they’re counting on.
The Statute of Limitations
As we mentioned above, collectors have a finite window within which they have the right to take you to court to secure a judgment in the event of an unpaid debt. This interval is defined by the statute of limitations in each state for each particular type of debt. Far too many people are unaware of this and get startled into payment when contacted about a “time-barred” debt (one upon which the statute has elapsed).
While it is true one does still owe any unpaid debt, as these Freedom Debt Relief reviews illustrate, there’s little reason to pay it if it is no longer reflected upon your credit report, other than the desire to do the right thing.
The Safest Response
Any time someone claiming to be a debt collector contacts you, tell them you have no recollection of such an obligation, and they’ve called you at a bad time. Express your willingness to get to the bottom of the situation — again — without taking ownership of the debt. Ask them to call you back at a time you choose. Make sure the time you set gives you ample opportunity to download an application that will give your phone the capability of recording calls.
During the Call
Begin by asking their permission to record their voice. Tell them you cannot accept the call unless they agree to have it recorded, if they refuse. Listen to what they have to say quietly and politely. Admit to nothing and deny any recollection of the debt once they’re done. Further, do not agree to supply them with any information about yourself — at all.
Ask them to send you — in writing — all records they have pertaining the debt. Tell them you want to know the current balance due and how much of that amount is fees, penalties and interest. Ask for the original amount of the obligation, as well as when the last payment was made on the account. You’ll also want to know where the debt was initiated (what state) and what type of debt it is. Request also the name of the original creditor, as well as the original account number.
They will likely ask you to request that information in writing. Ask for the address to which that correspondence should be posted. Send it by certified mail within 30 days, return receipt requested. Then ask them to refrain from contacting you until they have written proof you’ve received the requested information.
The Consequences
In many cases, all they’ll have is an account number, an amount and a name on a spreadsheet. Requesting detailed information is usually enough to get the nefarious ones to move on to the next name on the list.
The most important thing to remember is they’re probably recording the call too. You’ll restart the clock and they can pursue legal action against you to make you pay if you admit to owing the debt. If the debt is old enough to be time-barred, but young enough to be reflected on your credit report, you might want to pay it — or you might not — depending upon your personal circumstances. The best play here is to consult an attorney for advice.
Whatever you eventually decide, the key thing to remember to do if you’re contacted about an old debt — or any debt for that matter — is to challenge every call you get from someone claiming you owe money.