When a Collecting Agency Contacts Your Client About an Old Debt

In a previous infographic, we illustrated that when it comes to old debts, there is a statute of limitations which establishes a period during which creditors or collectors may sue borrowers to collect a debt.

In most states, the statute of limitations comprises between four and six years after the last payment. A debt outside this period is called a “time-barred” debt and prevents a collector from trying to collect at all once a debt is past the statute of limitations. Nonetheless, some debt buyers still go after borrowers and even take them to court.

If your client is contacted by a collection agency about a very old debt, Credit.com advices the following:

  • Ask the debt collector to send your client a written notice of the debt. This is required under the federal Fair Debt Collection Practices Act, even if you don’t ask.
  • Once your client receives written notice of the debt, they have 30 days to request validation of the debt. Mail your request to the collector with a certified letter and simply ask them to validate the debt.
  • While awaiting a response from the bill collector, have your client contact a consumer law attorney or their state attorney general’s office to confirm the statute of limitations for the debt.

If the client confirms the debt is too old, he has three choices:

  • Pay: If he knows he owes the debt and has the ability to pay it, he can do so. Advice him to keep written records of the amount due and the payment.
  • Settle: If he knows he owes a debt and wants to try to make good on it but he can’t pay the full amount (or if the debt has been inflated by fees), your client might want to negotiate to settle it for less than the full amount due. This part is tricky, for it could reset the statute of limitations, and he could wind up being sued for the entire debt. Your client should contact an attorney first.
  • Send the collector a letter telling to the leave him alone: Your client has the right to ask a debt collector to stop contacting him. The collector is only allowed to contact if they take legal action against your client.


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