Can You Still Collect on That Old Debt?

You’ve probably heard that there’s a statute of limitations on debt. Whether you owe money or are owed money, you’re probably eager to know if your debt can still be collected on. In both cases the answer is … it depends.

What Does a Statute of Limitations Mean

If you watch a lot of police shows you might be familiar with the concept of a statute of limitations when it comes to cold cases. Some crimes can no longer be prosecuted because it’s simply been too long. A similar idea is in play when it comes to debt collection. With debt, if the statute of limitations has expired that means that you can no longer sue, or threaten to sue, someone over the debt. It does not mean that you can no longer attempt to collect on the debt.

It’s not what I would recommend, or do, but legally, debt collectors can pursue old debt indefinitely. In a case where a debt has been sold to a third-party collector, the collector may be unaware that the statute of limitations has expired. If you are taken to court over a debt that you believe is past the statute of limitations, you will still need to show up in court and defend yourself.

After seven years, your old debt will also be removed from your credit score, but you may need to contact the credit bureau to ensure that this happens.

When Will the Debt Expire

So, what is the statute of limitations for debt? The answer is again … it depends. The length of time varies from state to state and in some cases is dependent on the type of contract you had. For example, a debt may expire sooner in the case of an oral agreement than in the case of a written agreement. You can find a complete list of states and their statutes of limitations here.

With the increase in interstate and international commerce there is some disagreement as to whether the statute of the state (or country) where the debt was incurred is followed or whether it should be the statute of the state (or country) where the debtor lives. If you have a debt that crosses state (or national) lines, you should consult with a lawyer.

What Should I Do About Old Debt I Owe

If you owe a debt, you should pay it. That is the agreement you made and it’s important for your own personal integrity and the health of your company to live up to your agreements. That being said, if you are not sure if you owe a debt that you are receiving calls about, you should not agree that you owe the debt or offer to make a payment on it. Instead, ask for a written notice and proof of the debt. It’s possible that the person calling you is a scam artist, or that the debt actually belongs to someone else with a similar name or contact information. Individuals should educate themselves about the Fair Debt Collection Practices Act (FDCPA). It’s important to note that the FDCPA does not apply to companies attempting to collect on debt they are owed, or to commercial debt.

What Should I Do If Someone Owes Me Money

Ideally, once a debt is 90 days overdue (or less) you will contact us! The longer a debt goes unpaid the less likely you are to be able to collect on it. The sooner you send a debt to us the more likely we are to be able to collect the highest amount that you’re owed. However, if you have a debt that you feel may be past the statute of limitations for collections, we’re still happy to take a look. Our agency does not accept claims that are past the statue of limitations, but we are always happy to look at large old debts to see if there is a way to make legally owed.

Ready To Collect Your Money?