Calling an original creditor to determine the date an account was closed is often helpful when resolving a debt. State statute of limitation laws regulate how long debt collectors have to pursue court action for an unpaid debt and the date the account was closed -- or the date of last activity such as a payment -- helps establish legal rights. Calling the original creditor to get the information may work just fine, but an alternative is available.
State Statute of Limitations
Unpaid debts never expire, but state statute of limitation laws offer some relief from old debts. State governments created the laws to prevent debt collectors from filing lawsuits on extremely old debts. Without the laws debt collectors theoretically could file a lawsuit 30 years after a credit card account was charged off because of nonpayment. Debt lawsuits are serious and can lead to court judgments for the original amount owed plus interest along with court costs and attorney's fees. Refusing to pay could lead to bank or wage garnishment. Check with a consumer affairs attorney or a local office of the state attorney general for help on state statute of limitation laws.
Validation
Statute of limitation laws vary by the state, with the average about seven years. The clock begins when the account is closed and charged off by the original creditor -- or from the date of the last payment or some other activity, such as admitting over the phone to a debt collector that the debt is valid and you are responsible for it.
Legal Defense
Once the statue of limitations expires the debt collector cannot win a court judgment if you or your attorney appears in court and informs the judge that the statute of limitations on the debt has expired and it isn't eligible for consideration by the court. Contacting the original creditor to determine the date the account was closed isn't enough. For starters, the original creditor may or may not choose to help. Some creditors sell accounts to debt collectors and the original creditor may simply refer you to the debt collector. The debt collector will likely suspect you are planning a statute of limitations defense and may also decline to help.
Credit Reports
Checking your credit report is the best strategy. The credit report will list a complete history of the account, including when it was closed and charged off and when it was purchased by a debt collector, if applicable. The initial date the debt collector purchased the account appears on the credit report, along with any other valid activity such as a payment or an acknowledgement by you that the debt is valid. The final date listed is used to consider statute of limitation defenses. Copies of credit reports are free from the Annual Credit Report website. The site is authorized to offer free reports under the terms of the Fair Credit Reporting Act. Visit the website to view and print reports
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