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Monday, September 21, 2009

Old Debts

Old Debts....
(Everything EXCEPT child support, tax debts and student loans-they all have their own set of special rules!)

Here's a new take on collection that is going around now.  Collectors depend on your lack of information about the law and not asking enough questions!

Please talk to a lawyer about collection problems.  Every situation is different and a lawyer can tell you if you have a defense or when you may be giving up a legitimate defense to a collection action.

Are Collection agencies, collectors calling you about an OLD debt?  An OLD debt for these purposes is a debt on which you have not made a payment in at least 5 years.

Scams or Fraud going on now:

If you have an "old" debt and collectors are contacting you, they may ask you to just make one payment to "make it go away."  What you may not know is that making that making just one payment will "REVIVE" the debt!

Reviving the debt means that you no longer have a 'defense' to collection of an old debt in court.
Here's the deal:

"Old" debts. If you have one, the collection agency/collector can still call you.  They can even sue you and take you to court. 
BUT you have a 'defense' to the lawsuit.  The defese is that it is "old" or "stale" because the statute of limitations for collection (the time they have to sue you) may have past.

Yes, the company can still sue you.  If you are sued on any debt, do NOT just ignore it and hope it will go away---- it won't!  The company may get a default judgement against you and be able to go forward with collection on the judgement, not just the underlying debt you owe.

What's that mean for you?

It means that you may have passed up a 'defense' to the lawsuit by not responding to a notice of a lawsuit or court date or you might pass up the 'defense' and revive the debt for purposes of collection if you make a payment on an 'old' debt.  Everything starts all over again and the judgement against you on the debt is now 'enforceable.'  The judgement holder can continue with collection actions in court and have wages and bank accounts garnished.

What to do:

1- If you are contacted by collectors on a debt that you have NOT made a payment on in at least 5 years (maybe 3 years in some cases), contact a lawyer!  Get information on your specific situation.

You can only get legal advice by talking to a lawyer about your situation.
Reading legal information like this is NOT legal advice!

2- Check your credit report at least once a year.  Some credit reporting agencies may add something to your credit history on the report of a collector or someone who has 'purchased' the debt from the person to whom you originally owed money. That second person or company, may add the debt and try to 're-age'the debt.  'Re-aging' means that they are trying to make the debt appear much more recent than it actually is.

If you have trouble figuring out a debt that appears on your credit report, talk to a lawyer.  Think about any old debts that you may have not paid on in a while, thinking that the creditor just stopped trying to collect the money.