What To Know About Old Debts
What if my debt is old?
Debt doesnt usually go away, but debt collectors do have a limited amount of time to sue you to collect on a debt. This time period is called the statute of limitations, and it usually starts when you miss a payment on a debt. After the statute of limitations runs out, your unpaid debt is considered to be time-barred.
If a debt is time-barred, a debt collector can no longer sue you to collect it. In fact, its against the law for a debt collector to sue you for not paying a debt thats time-barred. If you do get sued for a time-barred debt, tell the judge that the statute of limitations has run out.
How long the statute of limitations lasts depends on what kind of debt it is and the law in your state or the state specified in your credit contract or agreement creating the debt.
Also, under the laws of some states, if you make a payment or even acknowledge in writing that you owe the debt, the clock resets and a new statute of limitations period begins. In that case, your debt isnt time-barred anymore.
Can a debt collector contact me about a time-barred debt?
Sometimes. It depends on which state you live in. Some state laws say its illegal for a debt collector to contact you about a time-barred debt. But even if you live in a state where a collector may still contact you, they cannot sue or threaten to sue you over a time-barred debt.
What if Im not sure if my debt is time-barred?
Does a time-barred debt stay on my credit report?
Dealing With Collection Agencies
Identifying the collection agency is just the first step. Itâs important to get organized and take a step-by-step approach when dealing with collection agencies. The next step is to make sure that the debt they are trying to collect is yours and that the amount is correct. If you are being contacted about a debt or debts that you donât believe you owe, make sure you request verification. Use the guidance from the Consumer Financial Protection Bureau to make sure that youâre protecting your legal rights.
You will also want to dispute the entry with any credit reporting agency showing a debt you donât owe or that shouldnât be on your credit report for some other reason. You should send whatever proof you have along with your dispute. For instance, if you already paid the debt, send copies of your receipts or statements from the creditor showing your payments. If you didnât take out the loan, you may be a victim of identity theft or your credit file may have gotten mixed with someone elseâs. The first step to discover and correct that is to send a dispute so the credit reporting agency will be required to investigate.
Calculate How Much You Can Afford To Pay
Say youve determined that you do, in fact, need to repay your debt. Next, youll want to start thinking about what it will cost you to do so.
Before having a conversation with a debt collector, review your budget to see how much you can realistically afford to pay.
Its crucial to do this first, since failing to uphold your repayment agreement could restart your seven-year period of credit reporting and restart your period of legal liability.
The best payment option depends on your personal circumstances. Generally speaking, you have two payment options.
- Lump sum payment, or paying off all your debt at once, is the fastest way to resolve a collection. Its typically the most cost-effective, too, since it could give you leverage to negotiate a lower payment amount. But be warned that settling an account for less than the full balance owed may not be ideal in terms of your credit. Since you didnt pay off the entire debt as agreed upon originally, your lump sum payment may not have as positive an impact on your credit scores as paying the original account in full.
- Installment payments can help you manage the financial burden of repaying a large debt by spreading it out into monthly installments. But this option can put you at risk of restarting the statute of limitations on a debt and restarting the time period for how long the negative information continues on your credit reports.
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Checking Your Voicemail And Caller Id
Legitimate debt collectors will leave a voicemail and contact information if they cannot reach you directly on the phone. You also can locate a collection agency with just the phone number from your caller ID or voicemail by typing the number into a search engine. The search result may contain results from websites where other people have shared information about who called from that number and the nature of the call.
They Wont Give You Their Contact Information
Real debt collectors are from reputable companies with websites and reviews, and you can contact them if necessary. Ask the caller for the debt collectors company name, address and phone number.
If a scammer is on the other end, they might distract away from your questions and insist that the debt needs to be resolved. If they refuse to disclose their identity and company information, thats a telltale sign that its not a legitimate collection agency.
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Fair Debt Collection Practices Act
This federal law applies only to collectors working for professional debt collection agencies and attorneys hired to collect a debt. It is similar to Texas law, but also prohibits:
- “Unfair or unconscionable means to collect or attempt to collect a debt”
- Any conduct to harass, oppress, or abuse
If you are being subjected to harassing, abusive, or fraudulent debt collection tactics by professional debt collectors and you want to stop further contact with you notify the collector in writing. Keep a copy of your letter and send the original to the debt collector by certified mail.
Keep Up With Credit Reports And Debts In The Future
To avoid putting yourself in a similar situation in the future, its wise to repay your debts on time, so they dont eventually go to collections. Youll also want to stay up-to-date on each of your three credit reports, which can help you catch collection notices early, whether theyre legitimate or not.
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How To Find Out What Debt Collectors You Owe
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In a Nutshell
If it feels like youâre drowning in a sea of debt, it can seem impossible to find a life raft, especially if the debt collectors have already started circling. Getting a handle on who you owe and how much money you owe them is an important first step in sorting out your personal finances. This article will give you some tips and tools you can use to climb aboard that life raft, grab a paddle, and start sorting out your financial life.
Written byAttorney Amelia Niemi.
If it feels like youâre drowning in a sea of debt, it can seem impossible to find a life raft, especially if the debt collectors have already started circling. Getting a handle on who you owe and how much money you owe them is an important first step in sorting out your personal finances. Even though this can be intimidating and might feel hopeless, it can help you take concrete steps toward moving past your debts.
This article will give you some tips and tools you can use to climb aboard that life raft, grab a paddle, and start sorting out your financial life.
How Do I Get My Credit Report
There are three main credit reference agencies that you can get in touch with to get a hold of your credit file. Namely, Experian, Equifax and TransUnion . You can pay £2 to receive a paper copy that has all of your financial information broken down. Alternatively, if you want to get a copy of it for free, you have a few options:
- TransUnion offers a service called Noddle that provides a free credit reporting service for life.
- Equifax runs a service called ClearScore which allows you to view your report for free.
- Experian has a service called . However, you should keep in mind that this does not give you a full overview of your credit report.
After you have all this information, its a good idea to write it down in an intuitive way that you can understand. This will help figure out the amount owed as well as who you owe money to. Once you have all that figured out, you can begin planning how youre going to pay off your debts.
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Ask The Original Creditors
If you know you have an old debt that you havent paid but arent sure whom you owe now, contact the original creditor. The creditor should be able to tell you if the debt was assigned or sold to a collection agency. If the debt has been sold, however, the original creditor might not be able to negotiate with you even if it wanted to.
What Debt Collectors Cant Do
Debt collectors are regulated by the Texas Debt Collection Act. Among other things, the Act prohibits debt collectors from:
Using abusive collection tactics, including:
- threatening violence or other criminal acts
- using profane or obscene language
- falsely accusing the consumer of fraud or other crimes
- threatening arrest of the consumer, or repossession or other seizure of property without proper court proceedings
- using the telephone to harass debtors by calling anonymously or making repeated or continuous calls
- making collect telephone calls without disclosing the true name of the caller before the charges are accepted
Using fraudulent collection tactics, including:
- using a false name or identification
- misrepresenting the amount of the debt or its judicial status
- sending documents to a debtor that falsely appear to be from a court or other official agency
- failing to identify who holds the debt
- misrepresenting the nature of the services rendered by the collection agency or the collector
- falsely representing that the collector has information or something of value in order to discover information about the consumer
- Trying to collect more than the amount originally agreed upon. .
Violators of the Texas Debt Collection Act are subject to criminal and civil penalties. If you think you have been harassed or deceived, you can even seek injunctions and damages against debt collectors.
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When A Collection Agency Contacts You
The first time a collection agency contacts you, it must give its name and address, and the name of the original creditor . It must also tell you in writing the amount of the debt and any fees which have been added, such as interest or collection fees. You must also be informed of your right to dispute the information.
- A collection agency cannot call or write to you more than three times a week. Only one of those calls can be at work. You cannot be called between 9 pm and 8 am
- A collection agency cannot harass, intimidate, threaten, or embarrass you
- A collection agency cannot threaten violence, criminal prosecution, or use offensive language and
- If you send a written statement requesting a collection agency to stop, it cannot continue to call or write to you to demand payment.
Looking For Debt Relief Options Related To The Coronavirus
If youre having a hard time making payments because of the COVID-19 pandemic, youre not alone. Millions of Americans have experienced layoffs, furloughs and cut hours at work, which may make it difficult for many to pay rent, mortgages, auto loan bills, utilities, credit card bills and more.
Fortunately, the federal government, some mortgage and auto lenders, along with some credit card issuers have announced measures that might help relieve some financial burden and help you manage your payments and debt. Below is a summary of those resources.
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S To Take When You Receive A Notice That Your Debt Is Transferred To A Collection Agency
If you receive a notice that your creditor will transfer your debt to a collection agency, contact your creditor as soon as possible.
You may be able to:
- pay a portion of the amount or the full amount owed to avoid having the debt transferred to collections
- make alternate arrangements with your creditor to pay back your debt
Try To Work Out A Deal
When debt is in collections, the creditor’s or debt collector’s primary goal is to get all or some of the money that it’s owed. Therefore, you might attempt to negotiate a way to wipe out the debt, such as by making a lump-sum payment or by committing to a long-term payment plan.
Be sure to figure out how much you can afford to pay, either all at once or over time, before you make a settlement offer. Then, approach the debt collector with your idea. For instance, you might propose paying two-thirds of the $4,000 you still owe on a credit card or paying off your remaining $2,000 balance on a personal loan over the course of 24 months.
Before you hand over a single penny, make sure you’re clear about who to pay. If the original creditor still owns the debt, you’ll send your money to them. If the original creditor turned over your debt to an outside company, you’ll pay that company.
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Review Your Personal Records
If you canât find information about a debt on your credit report or the entry on your credit report seems wrong, check your personal records. Ideally, this means a neatly organized file folder filled with consecutively dated credit card statements or an online archive. Or perhaps you still have access to log in to your account on the original creditorâs website.
It may not be that simple, but donât give up too easily. Search your email archives, including your junk mail or spam folder. If youâre the type to throw ominous-looking mail in a drawer unopened, pull it out and take a look. Then, watch out for debt-related mail and open it promptly as it arrives. If you think you made payments on a debt a collector says is unpaid, check your bank account statements.
Make a list of the information you gather from your personal records. Compare it to the information you found on your credit report and the information you got from the collection agency.
What A Collection Agency Cannot Do
A collector cannot:
- use threatening, profane, intimidating or coercive language
- give any false or misleading information including references to the police or a law firm, credit history, court proceedings, lien or garnishment or imply that the collector or agency is part of a law firm or legal department of the collection agency or client
- threaten or state an intention to proceed with any legal action where the agency does not have the legal authority and consent of the creditor to do so
- discuss your debt or the existence of your debt with any person except you , a guarantor of the debt, the creditor or someone you have identified in writing as your representative
- if you want the collector to contact your representative to discuss your debt, you must provide that persons current address and telephone number
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How Can I Find Out Which Collection Agency I Owe
David J. Rubin is a fact checker for The Balance with more than 30 years in editing and publishing. The majority of his experience lies within the legal and financial spaces. At legal publisher Matthew Bender & Co./LexisNexis, he was a manager of R& D, programmer analyst, and senior copy editor.
The Balance / Bailey Mariner
Debt collectors work on behalf of lenders. Because you’re not directly involved with the sale or assignment of your debt to a collection agency, you won’t always know which collection agency has your debt.
Debt collectors typically announce themselves by contacting you through phone calls, letters, or other means. However, when you know you have an account in collections but don’t know which agency has the debt, there are four ways you can find out.
Contact The Debt Collection Agency
Once youve determined how much youre able to pay, the next step is to reach out to your debt collector.
While you may be tempted to let a third party manage the negotiations for you, you may want to reach out to your collector directly. Hiring a third party to settle or negotiate your collection debt can be expensive. In cases where the third party may not be reputable, it could also further damage your credit and put you at risk legally.
You can typically find your collectors information on your credit reports from the three major consumer credit bureaus. Since your debt may have been bought and sold by multiple collectors, be sure to look at your most-current credit reports to determine which company to contact.
Credit Karma offers free credit reports from two of the major consumer credit bureaus, TransUnion and Equifax.
The next step is actually getting on the phone with an agent from the debt collection agency. In addition to agreeing on a payment arrangement, heres what to ask for.
- The agents name and direct contact information Ask for this info in case you need to speak with that agent again.
- Updates to your credit reports If the agent cant or wont agree to remove the paid account from your credit reports, ask if the agent can update the account to paid as agreed upon once your payment are received.
- A written copy of your agreement Make sure it includes payment information and the updates to your credit reports you agreed upon.