Collection of Old Debts: Your Legal Rights

Attempts to collect the balances of old bills cause many to wonder how long they are responsible for payment of their debts. If you have this question and you figure ethics or morals into the answer then you are responsible to pay your debts until they have been paid. If you are speaking strictly from a business point of view and considering your best interest, the answer is dependent on the laws of your state.

Each state should have a statute of limitations that protects you from being sued for debts after a certain amount of time. Since you cannot be sued, most personal finance professionals advise people to abstain from paying debts that are beyond the statute of limitations. Not only has the damage been done to your credit report, but you may lose your right not to be sued if you begin making payments and then default again.

Credit Report

You have the right to have most debts removed from your credit report in seven years. When a collection agency works on your case, the agency may list a debt on your credit report despite the fact that the original creditor has also done so. You have a right to have the collection agency's debt removed on the same date that the original creditors' is removed even if it was reported many years later.

Third Party Collections

The primary reason that you are likely being subjected to old debt collection efforts is because your bill has been resold. This is a business transaction where a third party purchases your debt for substantially less than the outstanding balance. That third party then attempts to get you to pay which results in profits for them.

Be aware that the collection methods used by third parties are regulated by the federal government in the form to the Fair Debt Collection Practices Act (FDCPA). This body of regulations outlines forms of harassment, contact restrictions, and limits what may be discussed with your acquaintances when attempting to locate you. If these rules are violated you have the right to sue and to recover damages.

Since there is little reason to pay old debts after the statute of limitations has passed you probably don't want to continue communicating with collection agents. You have a right to tell them to stop contacting you, no matter how current the debt is, and they must do so.

Legal Representation

Having rights does not mean that they will always be respected. If debt collectors are acting unlawfully you should immediately consult with a debt resolution attorney to have the problem resolved.