“Am I Still Responsible For A Seven Year Old Debt?”

I read recently about a woman who was being dunned by a debt collection agency over a bill that was seven years old. She believed that she didn’t have a negative balance when she had stopped using the account and had not touched it in seven years. So she was wondering if this would appear on her credit report and whether or not she should pay the collection agency.

Old paper

What probably happened to this woman is that the collection agency had purchased “old paper” from an agency that had purchased it from the original bank. However, most states have a statute of limitations on debts and it is likely that a seven-year-old debt would not still be valid. Moreover, if the collection agency added this debt into her credit report, she could file a rebuttal letter along with a letter from the bank showing she had no balance due.

Watch out for unscrupulous debt collection agencies

This collection agency would probably fall under the category of unscrupulous because it should have known that a seven-year-old debt was no longer valid. But if you have extensive debts, you need to be careful of other tricks that can be played by unscrupulous collectors. For example, they could file suit against you, claim they had notified you when they hadn’t and then request a default judgment. If it was able to obtain this judgment, it could then put a lien on your house or garnish your wages.

Be sure to show up

If you find yourself on the wrong end of a lawsuit over a debt, be sure to show up in court to prevent the lender or collection agency from getting a default judgment. When you get to court you could fight the suit by challenging the agency’s standing – or its right to sue in its own name. In other words, the agency would need to prove it has the right to collect on your debt as shown by a signed transfer of the credit card agreement. You could make the collection agency prove that you owe what it says you owe. You might be able to use the statute of limitations as a defense as in most states creditors have a maximum of four to six years to collect a debt.

Sue back

Finally, you may be able to sue the collection agency back. Several years ago, Congress passed the Fair Debt Collection Practices Act (FDCPA). If you can prove the agency had violated its provisions, you might be able to sue it. If you have an attorney who knows what he or she is doing, you might be able to get damages, attorney fees and costs. In fact, if you can successfully sue for violations of this act, you can get statutory damages of up to $1000, plus economic and punitive damages. In addition, the agency will have to pay your attorney’s fees and costs

Know your rights

If you’re being harassed by a collection agency – even if it hasn’t yet filed suit – it’s important to know your rights. Go online, check out the FDCPA to see what collectors are allowed to do and not do and to learn how you might be able to put a stop to those harassing phone calls.