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When to Pay Off Your Debt

When being contacted by a debt collector, I often hear cPiggy _bankomplaints from consumers that the debt is "too old" and the question, "how can a collector contact me about a debt that is so old?"  While the answer to this question is simple, a debt collector can attempt to collect a debt from you forever as long as he or she adheres to the guidelines of the Fair Debt Collection Practices Act ("FDCPA"), the explanation is a bit more complicated. 

In answering the question, I must first address what is considered "too old" to collect.  A collector can contact you to collect a debt for the rest of eternity.  However, you cannot be sued on a debt after your state's statute of limitations has passed and it cannot report the debt on your credit file after 7 to 10 years depending on the type of debt being collected.  For a complete list of each state's statute of limitation based on the type of debt being collected visit our firm's website.  Both threatening to file suit when the time to file that suit has passed, and/or threatening to reporting the debt to the credit bureaus beyond the reporting time limits are a violation of the Fair Credit Reporting Act ("FCRA") and the FDCPA.      

The reason behind why repayment of an older debt is optional is because if you cannot be sued for the debt and it cannot be reported on your credit file, then the only reason one would pay the debt would be a moral obligation.  However, there is no longer any legal obligation to pay that debt.  In fact, in some states making payment on an old debt could re-start the statute of limitations period, making the debt essentially new and collectable.  Essentially, the new payment is taken as a new payment agreement or new contract which will have its own new statute of limitations.  If you do plan to repay the debt, make sure you either pay the debt in full or for an agreed upon settlement amount.  Making a small good faith payment will restart the statute of limitations and the collector then has the right to file a law suit. 

If you want to stop a collector from contacting you regarding an optional debt, the first step is to write a cease and desist letter telling the collect to stop contacting you.  Make sure to send this letter by certified mail and to save a copy for your records so you have proof that the collector received it.  Upon receipt, under the FDPCA, the collection agency can no longer contact you to collect the debt outside of a few isolated exceptions-acknowledging receipt of your correspondence and to notify you of a lawsuit (which it cannot legally file anyway).   

If you feel your rights have been violated under the Fair Debt Collection Practices Act, contact SmithMarco P.C. for a completely free case review. 

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