What Happens if I Don't Pay a Collection That Is Not in My Credit Report?

The Fair Credit Reporting Act, a federal law, places limits on how long collection accounts and other negative credit information can appear on credit reports. The limit for collection accounts is seven years, with the information usually automatically dropping off credit reports after that. However, that does not relieve the debtor of responsibility for paying the debt. Old debts never die, although the debt collector's ability to collect may diminish over the years. Failing to pay a debt no longer appearing on credit reports may prompt the debt collector to look for ways to "re-age" the debt so that it reappears on credit reports for another seven years.

Considerations

Bankrate reports that debt collectors may contact debtors about debts no longer appearing on credit reports. One tactic for the debt collector is to solicit a payment of any amount on the debt -- even for just a few dollars. The payment reactivates the debt for credit reporting purposes and could allow it to reappear on credit reports.

Leverage

Getting the collection account back on the debtor's credit report is a victory for the debt collector because it provides additional leverage for collecting the debt. The debtor may have no intentions of paying the debt but could be forced to do so as a condition of approval on a major loan such as a mortgage or home equity loan. Some mortgage companies may have strict rules against approving applications from people with active collection accounts on their credit reports.

Precautions

Debtors with a debt not appearing on their credit report should not make partial payments or even acknowledge to a debt collector that the debt is valid, according to Bankrate. Acknowledging the debt could also allow it to reappear on credit reports. Collection accounts often bounce around from one debt collection agency to another, allowing a new debt collector to contact a debtor about a debt that has not appeared on credit reports for years.

Statute of Limitations

State statute of limitation laws also set time limits for debts. Laws vary according to the state, but usually debt collectors have about six years to win lawsuits for unpaid debts. Debts beyond a state's statute of limitations are too old for consideration by the courts. Debt collectors can still file suits for debts that are beyond a state's statute of limitations, but the judge in the case will dismiss it if the debtor shows up in court and points out the statute of limitation guidelines during a defense. Some debtors choose to simply ignore debts that no longer are appearing on credit reports and are beyond state statute of limitations guidelines.