Can a Creditor Come After You After the Statute of Limitations?

When a debt goes unpaid, the creditor who owns the debt attempts to collect the money that is owed plus any late charges or other fines that have been added to the debtor's account. If the collection attempts are unsuccessful, the creditor can continue trying to collect on the debt for several years after the debt was created.

Collection Attempts

When attempting to collect on a debt, a creditor may contact the debtor who owes the debt by mail or phone. If the creditor feels that the debt is worth pursuing, a lawsuit may be filed against the debtor to try and gain a court order to ensure payment of the debt. Creditors may not harass a debtor, disclose information about the debt to anyone other than the debtor or make threats, such as threatening to take the debtor to court or have him arrested. The creditor may sell the debt to a credit collection agency, giving the agency the right to attempt collection on the debt instead of the original creditor.

Statute of Limitations

The statute of limitations on debts is the amount of time that a creditor or debt collector has to collect on an unpaid debt. The length of the statute of limitations varies depending on the state where you live and the type of debt account that collection attempts are being made on. Collection attempts or lawsuits filed after the statute of limitations has expired are not considered valid because they were not made within the time frame allowed by your state. The statute of limitations begins at the point that the debt was charged off by the creditor or when the last payment was made on the debt, whichever is later.

Actions After Expiration

Credit collection agencies may still attempt to take legal action after the statute of limitations has expired. If a lawsuit is filed on a debt that has exceeded the statute of limitations in the state where the defendant lives, the debtor should ask the court to dismiss the case on the basis that the statute has expired. The court will review the case, and upon determination that the statute is truly expired, the court should dismiss the suit. If collection attempts continue, the debtor should send a notice to the creditor via certified mail stating that the statute of limitations has expired and asking not to be contacted again about the debt.

Resetting the Statute

Making payments on a debt that is in the collection process typically resets the statute of limitations; this is often the reason that debt collectors will aggressively pursue debts nearing their expiration in hopes that the debtor will make a payment. The sale of a debt to a collection agency by the original creditor generally does not reset the statute, though some creditors or collection agencies will attempt to do so by misreporting the starting date of the debt as the date that it was sold. Debtors have the legal right to sue credit agencies who "re-age" the debts they purchase in this manner as the practice is illegal in many jurisdictions.

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Do Unpaid Medical Bills End Up on Your Credit Report?

Unpaid medical bills are likely to appear on your credit report -- if the doctor or medical facility turns the account over to a debt collection company. Collection agencies place negative information on your credit report in an attempt to get you to pay. Once posted, the information can remain on your report for up to seven years and hurt your chances of receiving new credit at the lowest interest rates.

The Billing Process

Medical providers submit bills to health insurance companies after treatment. In some cases, you can make payment arrangements if you are uninsured. The insurance company makes a determination on paying the bill based on your policy. The company may pay all or a portion of the claim, leaving you responsible for the rest. The doctor or health facility will bill you directly for any remaining portion.

Timetable

It could take several months for unpaid medical bills to show up on your credit report. The timing varies depending on how quickly the bills are processed and how aggressive your doctor or medical facility is in collecting outstanding debt from patients.

Payment Plans

Most doctors and medical facilities accept payment plans on balances not covered by insurance. Payment plans are also possible for people who are uninsured. The medical debts generally aren't a problem as long as you continue making payments as promised. However, if you stop making payments, the doctor or medical facility may turn the bill over to a debt collection company.

Debt Collection

Debt collectors are paid only if they collect from you, and that is the main reason they place information on your credit report indicating that you have defaulted on medical debt. The purpose of the listing is to get your attention and entice you to pay. The debt collectors know that the information could lower your credit score or keep you from being approved for a home mortgage.

Resolving the Issue

Some debt collectors will remove negative credit information from credit reports if you agree to pay in full -- a process called "pay for delete." However, the debt collector is not required to do so, and the information can remain on your credit report for seven years. Once you resolve the balance, your credit report will be updated to show that you paid off the delinquent medical debt. That could be enough to end any problem with being approved for credit as long as the rest of your credit report is satisfactory.

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What Is a Judgment From a Credit Card Company?

A credit card company may file a lawsuit against any account holder who fails to pay his credit card debts in a timely manner. If the court sides with the credit card company, it awards the company a judgment.

Significance

A judgment grants a credit card company additional collection rights beyond merely calling a debtor and sending demands for payment through the mail. Most states permit judgment holders to garnish wages and bank balances. In some states, a credit card company can even use its judgment to place a lien against a debtor's home or vehicle, according to the Santa Clara University website.

Time Frame

Each state possesses a different time frame over which a judgment is valid (see the Resources section). Some states, such as California, allow creditors to renew their judgments for a subsequent term as long as the creditor files for renewal before the initial judgment expires, explains the Sacramento County Public Law Library website. Once a judgment expires, however, the creditor cannot use it as a collection tool.

Effects

Judgments are a matter of public record. Once the court enters the judgment into the public record, the credit bureaus will retrieve it and enter it on the consumer's credit report. Credit card judgments are derogatory and can damage a credit rating.

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How to Terminate a Garnishment

Wage garnishments can be placed on your paychecks for multiple reasons. If you owe child support, taxes, large debts or student loans and have made no attempts or plans for payment, your wages can be garnished. Terminating a garnishment can involve payment, court hearings or bankruptcy. Whether you can end a garnishment depends on the source of the garnishment. It also depends on the amount of financial strain the garnishment places on you and your household.

Instructions

1

Prevent the garnishment. The best way to avoid a garnishment on your wages is to avoid it altogether by paying the full amount owed. If this is not possible, communication will likely improve the circumstances greatly. Communication with the loan agency, Internal Revenue Service or court could result in payment arrangements that benefit both parties. As long as you make timely payments as agreed to in the arrangement, garnishment should be prevented altogether.

2

Seek debt consolidation. In many cases, debt consolidation can remove a garnishment. It will not work for child support, but other forms of garnishment can be removed by consolidating your debts. A debt consolidation company will work with your creditors to create a mutually beneficial payment arrangement.

3

Claim exemption. If you can prove that the garnishment is causing you undue hardship, you can lessen the amount or percentage of the garnishment. An undue hardship will only be valid if the hardship is real. If you cannot pay your rent, mortgage payment, or utilities, it will probably be considered. If you are merely inconvenienced by the garnishment, the court will side with the company executing the garnishment.

4

File bankruptcy in extreme cases. In a bankruptcy ruling, the court orders creditors to stop any attempt to collect debts from you. After the judge has ordered the debts to be discharged, they are no longer considered owed. For the majority of student loans, a bankruptcy will not affect collections of these garnishments. However, if the debtor can prove that further garnishments to a student loan company will cause undue hardship, the judge can choose to include the loans in his decision. In the case of child support, bankruptcy does not stop garnishment or collection activity.

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The Best Places to Receive a Credit Report

Your credit report is an important financial tool. It provides information to creditors, lenders, insurance companies and even employers to help them make decisions. The information on your credit report can mean the difference between getting a loan, insurance policy or job and getting turned down. Credit reports are typically received from three sources. You can receive your own reports to make sure the information on each is correct and to challenge any erroneous items. The three major credit bureaus are Equifax, Experian and TransUnion.

Equifax

Equifax offers reports to businesses and creditors for review, and it sells a variety of services to consumers. For example, you can purchase your FICO score from Equifax or sign up for a paid credit monitoring service. However, they are required by the Fair and Accurate Credit Transactions Act to give you a free copy of your credit report every year if you request it. You can receive this free report by visiting the Equifax website and clicking the "Free annual credit report" link. This will take you to the official site for requesting the no-obligation report.

Experian

Experian sells your credit report to lenders and businesses to review in their decisions. It also offers paid services to consumers, such as identity theft protection and credit scores. However, like the other bureaus, the law requires it to give you a free copy of your credit report annually upon your request. You can get this free report by visiting the Experian website and clicking the link for the Annual Credit Report site. If you request your report in any other way on its site, you will be enrolling in paid services.

TransUnion

In addition to selling credit reports to businesses and lenders, TransUnion also offers a variety of paid consumer services. These include identity protection and access to the consumer's credit score. TransUnion is required by law to provide a free copy of your credit report on an annual basis. To get this report without paying for other services, visit TransUnion's website and click the link offering information about free credit reports and the Fair and Accurate Credit Transactions Act.

Freecreditreport.com

Freecreditreport.com, which is owned by Experian, has frequent television ads implying that you can get your credit report at no cost through its service. However, it downplays the fact that you can only get the free report if you enroll in its Triple Advantage paid service. The Federal Trade Commission (FTC) even fought the misleading ads by producing a spoof ad of its own to warn consumers.

Other Websites

There are many other websites that are not as well known as Freecreditreport.com but operate the same way. They offer a free credit report without making it clear that you must agree to purchase another service. The only truly free website with no strings attached is the Annual Credit Report site, which can be accessed on its own or through the three credit bureau websites.

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How to Fight Non-Periodic Garnishment

Wage garnishment occurs after a creditor successfully receives a judgment against you for an unpaid debt. This can be for back child support payments, credit card debt, back rent, or any other legal debt. Nonperiodic garnishment (a seizure of funds that happens only once or at irregular intervals) can be any amount up to the total amount of the debt, along with any penalties that might be owed. To fight garnishment, you must either petition the court to cease the action or successfully declare bankruptcy. To increase your chances of successfully combating garnishment, you should retain a lawyer.

Instructions

1

Contact the creditor garnishing your account and ask to set up a repayment plan for the debt. In most cases, that will not entail going back to court or hiring a lawyer. The disruptions that garnishment can cause might make it more challenging for you to hold down a job, which would make it even more difficult for you to pay the garnishment, so it's in the interest of the creditor to negotiate such a payment plan. Get all agreements with your creditors in writing, and maintain copies for your archives.

2

Review the Fair Debt Collection Practices Act. If the creditor violated any statutes from that act, and you can prove it, you may be able to get the debt cancelled. This will also give you some understanding of the laws relevant to your case.

3

File a petition with the court that filed the judgment against you, detailing the judgment. You'll be expected to include the case number, the amount of the debt still owed, and information about how much money has been seized from your accounts. Describe your case and your reasons for filing an appeal. Find a lawyer to assist you in drafting your petition. Most lawyers will give you a free 30-minute consultation if you require advice on writing your petition. Avoid emotional arguments in your petition. Argue your case in terms of the relevant laws.

4

Send the petition to the court and await a response.

5

Attend all court dates related to your petition. In most cases, the creditor will settle the case in return for a realistic repayment plan or a lump sum repayment of the debt.

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How to Reduce Debt When You Are Broke

Being in debt with no money to pay it down can be stressful as well as negatively impact your credit and financial stability. But with planning and a concerted effort, you can make small steps to pay down debt even if you don't think you have the money. You'll need be committed to paying down debt, however, including making difficult decisions about your spending and finding extra money.

Instructions

1

Take a look at your current financial situation. You may know you're broke, but you need to know the minute details of your financial situation before you can fix it. Review your bank statements to find out how much money is coming in and where its going. Group your expenses into categories such as food, utilities and of course, debt/loans. Pay special attention to the nickel and dime spending (vending machines, magazines, etc) and items you don't really need.

2

Add up all your debt. Include total balance, interest rate and minimum payments. Take note of monthly fees you may be paying for being late or not making minimum payments.

3

Cut up your credit cards. Once your debt is down, you can reorder new cards if you think you'll need them. But if you have them you'll be tempted to use them. If you can't bring yourself to cut them up, file them away. Don't carry them with you. Hopefully you'll learn to live on cash and never need them again.

4

Reduce your spending.Quick ways to cut expenses are to reduce or eliminate cable or extra phone features. Stop spending money on things you can rent or borrow for free such as movies and books which can be found at libraries or online for free. Redo your grocery list to cut out expensive items. Shop with a list and use coupons if they will save you money over buying the generic brand. Use the Internet to find great offers, coupons and rebates on things you need to buy.

5

Sell your unwanted or unused items to make extra cash. Amazon, eBay, and Craigslist offer fast, easy ways to sell everything from books, electronics, furniture, clothes, collectibles, and more. Listing items is free on all three sites. Amazon and eBay collect their fees after the sale. Start by going room to room to find items you can sell and then list them. Within a week or even days, you can have extra cash to put towards your debt.

6

Make extra money from home. Second jobs outside the home may cost more than you earn, so a great option is to use your skills and experience to find a part-time, work-at-home job or start a home-based business. Don't look for sign-up-do-nothing work-at-home programs. Use what you know to make money. If you're a retail worker, find a home-based customer service job. If you're a teacher, find an online tutoring or teaching job or start a tutoring business.

7

Use the money you save on your expenses and you earn by selling your stuff or working an extra job toward your debt payments. If you can pay more than the minimum payment. Pay your smallest debt first to gain a sense of accomplishment quickly. When that's paid, add the money used towards the first debt to make payments to other creditors starting with the one with the highest interest rate. Each time you pay off a debt, apply the money to remaining debts.

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