A debt collector can attempt to collect on a debt as long as it remains unpaid, as long as he does not violate the Fair Dept Credit Practices Act (FDCPA). A debt collector may not be able to sue you for a very old debt, however, depending on just how old the debt is.
When Debts Remain Unpaid
A debt collector may report a validated, unpaid account to a credit reporting agency if his attempts to contact you and collect payment have been unsuccessful. Some debt collectors may still attempt to contact you a few times even after your account has been reported. A collection account remains on your credit report for seven years, even if you pay the account within the seven-year period. The account would just be updated as "paid" on your credit report.
Very Old Debts
Every state in the U.S. has a statue of limitations (SOL) for debt collection. The SOL is a period of time during which a debt collector can take legal action against a debtor. This SOL period varies from state to state. Debts such as federal student loans, taxes and past-due child support in some states do not have a SOL. A debt collector may still attempt to collect an unpaid debt that has passed the SOL, but he would no longer be able to do so through the courts.
Re-Aging
The credit reporting period and the SOL on a debt begins on the date of delinquency, or on the date of the last payment received, on the account. Many collection agencies engage in the illegal practice of "re-aging" an account. This involves changing the date of delinquency or date of the last payment received to make an account appear more recent. Changing these dates restarts both the SOL and credit reporting period to begin from the new or "updated" date. As a result, the account remains on the credit report longer than it should, and the debt collector has more time to try to sue a debtor.
Re-Aging and Your Credit
Re-aging drags down your credit score, making it hard for you to re-establish good credit. For example: A collection account for a debtor in New York is reported to the credit reporting agencies in October 2006. It will stay on the report until October 2013. A debt collector "updates" the report in August 2010, which is now the new date of delinquency. The account will now remain on the report for four more years, rolling off in August 2017 unless it is updated again. New York's SOL is six years. The debt collector originally had until October 2012 to legally collect on this debt. Now he has until August 2016.
What You Can Do
Check the SOL in your state. Collection agencies who re-age accounts are in violation of the Fair Debt Collection Practices Act (FDCPA). The FDCPA has strict credit reporting guidelines that credit reporting agencies and debt collectors must adhere to or face harsh penalties. You can file a complaint with the Federal Trade Commission and your state's Attorney General Office if you feel a debt collector is violating the FDCPA.
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