What are Time-Barred Debts?
Time-barred debts are debts that have aged enough that creditors and debt collectors can no longer sue you to collect them. These old debts are referred to as uncollectible accounts. These are debts that have a very slim chance of being collected. The original lender often sells these debts to a debt collection agency.
Legal Action for Time-Barred Debts
The Fair Debt Collection Practices Act (FDCPA) prohibits debt collectors from suing you or even threatening to sue you for a time-barred debt. However, this doesn’t mean it won’t happen. In February 2012, the Federal Trade Commission (FTC) sued one major debt collector, Asset Acceptance, for violating this part of the Fair Debt Collection Practices Act. As part of the settlement, Asset Acceptance is now required to include a “we will not sue” notice in collection notices for debts that have exceeded the time limits established by the statute of limitations.
Debt Collectors Can Still Engage in Debt Collection Activities
Do not assume that just because the debt is time-barred, you are no longer liable for it or that the collector cannot pursue you for the debt. Collectors can still attempt to collect time-barred debts through calls and letters (of course, within the law).
What You Can Do
There are some ways to deal with a debt collector trying to collect a time-barred debt from you. First, ask the debt collector to provide you with written verification of the debt. This process is called debt verification and must be done within 30 days of the collector’s first contact with you. Once you send a written request for verification, the collectors cannot attempt to collect the debt from you until they provide evidence that you owe the debt.
Send a written notice to the debt collector asking them to stop contacting you. If you do not want to be contacted by the debt collector anymore, you should send a written message stating that the debt is time-barred, and you do not wish to be contacted about the debt. The collector can contact you once more to inform you of what they intend to do next, if anything, after which you should not hear from that collector again.
Is This Still a Debt?
Ignoring the debt does not make it go away, but you may choose this option if you do not want the hassle of sending letters. Remember, the debt does not disappear just because you ignore it.
You can ignore the debt, and it will remain on your credit history, and debt collectors may continue to try to collect the amount owed. You can also pay the amount owed in full or a part of it. However, if you pay part of the amount owed, you may reset the statute of limitations clock and open the door for the collector to sue you for the debt. They may also add interest and additional fees to the total amount being pursued against you in any lawsuit.
Remember, as long as the debt exists, it can be sold and assigned to different debt collection agencies. You will have to repeat these steps each time a new debt collector begins collecting your debt. If a debt collector violates your rights, you can file a complaint with the Federal Trade Commission and your state’s Attorney General’s office. You may also be able to sue the debt collector for up to $1,000 plus damages.
Source: https://www.thebalancemoney.com/what-you-should-know-about-time-barred-debts-960567
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