In a recent post I discussed that the Seventh Circuit held that
it is a violation of the Fair Debt Collection Practices Act
(“FDCPA”) for a collection agency to pressure a consumer to make
payment on a time-barred debt. This sparked the question “What
exactly is a time-barred debt and how do I find out the timeline of
my debt
to avoid making a payment that I may not necessarily need to
pay?”
The simple answer to the question is, a debt that has passed the
period of time in which a collection agency can report the debt on
your credit report and/or sue
you for collection. The first way to find out the age of
your debt is to see if it has been deleted from your credit
file. Each of the three major credit reporting agencies, Equifax, Experian and Trans Union contain different information so
you must pull a copy from all three agencies to see if the account
in question is still reporting. You are entitled to one free
copy of your
credit report a year from each of the three credit reporting
agencies. You can obtain a copy of your report at AnnualCreditReport.com. I suggest using
this website to order a copy, other websites advertise free reports
but may end up requiring you to sign up for another service that
could cost you money in the long run.
After reviewing
your report you can find out the age of the debt. If the
debt is no longer on your report, then you more than likely do not
need to make payment. If the debt is still reporting on your
credit file, review the information and make sure the dates
reported are accurate. If the debt is older than seven years
from the last date of delinquency (the last date when you fell
behind on payments) then the account should no longer be reported
and you will need to dispute the information with the credit
reporting agency to have the account removed. Some exceptions
to the seven year rule do apply, including Chapter 7 bankruptcy
filings, judgments, student loans and tax liens.
Each state has its own
statute of limitations that will determine the length of time a
collection agency may file suit against you to collect the debt
through the court system. There is no law, however
prohibiting a collection agency from attempting to collect a debt
that is beyond
that statute of limitations by calling or sending a
letter. In other words, a collector can attempt to collect a
debt forever, but why would you pay a debt that cannot be reported
on your credit file and that you cannot be sued for.
If you believe you are being contacted regarding making payment
on a time-barred debt or you have a debt that is passed the statute
of limitations still reporting on your credit report, contact SmithMarco P.C. for a free case review.