Collection agencies sometimes buy old debts for a fraction of their value in hope that they can persuade debtors to pay, or settle, the account. However, if a debt is past the statute of limitations, and the collector tries to file a lawsuit, you can ask the judge to dismiss the case.
Types
Wisconsin law sets the statute of limitations on collecting most consumer debt, such as credit cards and written contracts, at six years. If a creditor does get a judgment against you, it has 20 years during which it can pursue you for the debt.
Solution
Never agree to pay a debt just because a bill collector calls and says that you owe it. If you do this, you could possibly restart the statute of limitations on the debt. Instead, invoke your rights under the federal Fair Debt Collections Practices Act (FDCPA) and send the bill collector a debt validation letter that requests information about the debt.
Misconceptions
The statute of limitations on filing a lawsuit or collecting a judgment is different from credit reporting. In Wisconsin, even though the statute of limitations on suing someone to collect a debt is six years, the debt can remain on your credit report for up to seven years.
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