Know Your Rights

Paying Off Debts: How Old Is Too Old?

You recently obtained a copy of your credit report and notice an old debt that is hurting your score.  You do not know whether you should pay it. 

There are many factors to consider.  First, look at the age of the debt.  Every state has a different statute of limitations that covers how long a creditor has to file a lawsuit to seek a judgment for the debt it is owed. The statue of limitations is the amount of time a collector has to sue you for a debt.  After a certain period of inactivity on the debt (meaning no payments toward the debt), the debt becomes time barred and the collector can no longer sue you for it.  Find out the statute of limitations in your state by clicking here.  If that time has passed, and it can be as little as 3 years in some states and as much as 10 in others, then there is absolutely no responsibility to pay that debt, and no consequence for refusing to do so. 
Second, consider the operation of the Fair Credit Reporting Act.  Under the Fair Credit Reporting Act, negative information can only be reported for up to 7 years.  When the delinquency was fresh and recent, the effect on your credit was at its worst.  As time goes on, the effect that the delinquency has on your credit lessens.   Ultimately, it comes off altogether.   The 7 year period starts 180 days after the date of the first delinquency.   So consider how much longer this item will remain on your credit report.  There are certain exemptions to this rule like Bankruptcy and tax liens. 

Third, closely look at the information related to this debt on your credit report.  Is it your debt?  Is the date on the debt correct?  Are their any errors related to this account?  If you do not owe the debt or the debt has erroneous information, you must dispute this with the credit reporting agency.   An old debt that has been passed to different collection agencies might have incorrect information, such as the date.  Look closely at the old debts to verify that information reported is correct.

If you have an error on your credit report,  send a letter disputing the error to each credit bureau reporting the error.  For a step-by-step instructions to disputing errors, click here.  One important piece of advice is to  send your disputes certified mail, receipt requested.  Keeping a paper trail of your actions will be extremely helpful.  To view complete article, click here.

SmithMarco, P.C., has over 30 years of combined experience practicing law protecting the rights of consumers around the country. If you questions or want a free case review, contact us today. 



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