What to Do If You’re Contacted about an Expired Debt

The wrong move could wreak havoc on your finances by having you pay for something you didn't have to

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In part one of this article, we explained what the statute of limitations is and how it affects you during a debt collection. Here, in part two, we’ll tell you what to do if you’re contacted about a debt that is past the statute of limitations.

As mentioned before, the statute of limitations refers to the amount of time a debt collector has to sue you for an unpaid debt. After this time, a collector cannot sue you and win. Even though a debt collector is not allowed to sue you or threaten to sue you for a time-barred debt under the Fair Debt Collection Practices Act, some will still try to collect the debt by convincing you to pay it back willfully. What should you do if you’re contacted by a debt collector about a time-barred debt? BlackEnterprise.com has a few tips for you.

Don’t acknowledge the debt. Once the debt has become uncollectible, you cannot be forced by a court to pay. However, if you tell a debt collector that you are responsible for an old debt, this statement will re-start the statute of limitations. In this case, you can be sued for the debt and the debt collector is likely to win.

Don’t agree to a payment plan. Agreeing to pay a debt that is past the statute of limitations is called debt reaffirmation if the debt was part of a bankruptcy. In other cases, it’s known as re-aging or re-establishing. This action also restarts the statute of limitations, leaving you open to a lawsuit if you can’t pay up. Making any payment, even if it’s not part of a payment plan, will also restart the clock on your debt.

Don’t sign any paperwork. Sometimes a collection agency will send a letter about your debt. They might ask you to check a box indicating if you want to make a payment now, if you plan to make a payment at a later date, or if you can afford to pay at all. This is actually a sneaky trick to get you to acknowledge an uncollectible debt and restart the clock so they can sue. In this case, send a certified letter telling the collector that your debt is past the statute of limitations and you want them to put an end to all efforts to collect the debt.

Keep a recent credit report handy. Your credit report will show the date of last activity on your debts. You can use this as proof that the statute of limitations on your debt has passed if you’re ever taken to court by a debt collector who claims the debt is still active and collectible.

Sheiresa Ngo is the multimedia content producer for consumer affairs at Black Enterprise.

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