Consumer's Rights For an Old Debt

If you have worked hard to clean up your credit report, there is nothing more frustrating than an old debt that suddenly reappears on your record. Fortunately, you have rights under federal and state law that can help remove old debts from your credit report and stop any ongoing collection activity on debts that are outside the statute of limitations.

Statute of Limitations

Most states have a statute of limitations on how long a creditor has to collect a debt, including filing a lawsuit against the debt, which in some states can be as little as three years or less, depending on the type of debt. Debts that are no longer legally collectible are sometimes called out-of-statute or time-barred debts.

Types of Debt

The statute of limitations on debt collection in your state will often vary depending on the type of debt. For example, your state may set the statute of limitations on credit card debt at five years, written contracts at 10 years and judgments at 15 years or more. You should be aware that the statute of limitations on judgments can be renewed at a judge's discretion, making this one type of debt that is hard to escape.

Credit Reporting

Just because a debt is no longer collectible does not mean that the creditor can't continue to place negative information on your credit report. Negative information can be placed on your credit report for seven years after your account became delinquent and never became current again. However, it is illegal for a creditor or collection agency to "renew" the date of your debt so as to keep negative information on your report for more than seven years. You have the right to have this "re-aged" information removed from your credit report.

Zombie Debt

Some debt collectors specialize in collecting debt that is no longer collectible. They do this by buying up old time-barred debt and then harassing and intimidating debtors into paying up. You don't have to pay this debt, and you can use your rights under the federal Fair Credit Reporting act, as well as state law, to stop their collection action against you.

Warning

If you receive a communication about an old debt from a creditor or collection agency, do not ignore it. While it may not be a collectible debt, this won't stop unscrupulous collectors from placing negative information on your credit report or even filing a lawsuit against you. Respond immediately to any attempts to collect an out-of-statute debt by sending the creditor or collection agency a request that they validate the debt and inform them that you believe that the debt is outside the statute of limitations in your state.