How Long Can a Debt Collector Pursue Old Debt?

Debt collectors can make your life miserable. Between the letters, emails, phone calls, and even knocks on your door, it’s all enough to make you wish you could disappear to that Hawaiian island you’ve been dreaming of. As always, though, information is power, and the more you educate yourself on what debt collectors can – and cannot – do, the more you’ll be able to resolve your own financial crisis and send those debt collectors away.

How Does Debt Collection Work?

A debt collector enters your life when you fail to pay off a balance or you fall behind on your payments. Debt collectors are essentially third-parties that work on behalf of the company to whom you owe the money. It’s also possible that the debt collector will purchase your debt from the original loaner and then pursue you for repayment. Debt collectors may specialize in different types of debt, including medical or student loans. 

Once you miss a payment on your loan, you’ll begin receiving notices from the lender. If you do not respond, those notices will eventually stop, and this is when the debt collector enters the picture.

How Long Can a Debt Collector Legally Pursue Old Debt?

It depends on the state. In Texas, for example, the statute of limitations on a debt is four years. In Colorado and Connecticut, however, that limit is six years. Do a quick Google search for your state, and you’ll easily see the statute of limitations for where you live.

What Happens if You Are Being Pursued by a Debt Collector after the Statute of Limitations Has Expired?

Once the statute of limitations expires, you can no longer be sued by a debt collector in court for repayment. Even so, there are still places where debt collectors can pursue the repayment of the debt even though the statute of limitations has expired.

When Will a Debt Collector Sue?

A debt collector, of course, is out for their own interests, and as such, they will sue you for not paying a debt if they believe they have a realistic chance of winning. Some factors that influence their decision include whether you have any positive equity, including property, the amount of debt you already have, state laws about garnishment, and, of course, the statute of limitations.

Should You Pay Your Debts after the Statute of Limitations Has Expired?

To make that decision, take a look at your credit report, which you can access once a year from Equifax, Experian, and Transunion. If you see that debt on your credit report, consider paying it off because doing so can improve your credit score. If you know, though, that the debt will be dropped from your credit report soon, you might be better off just letting it fall off.

When Is the Best Time to Get Help?

Ideally, you will reach out for help as soon as you realize that you are going to miss a payment on a loan. You’ll find plenty of options that can help you avoid defaulting and going through debt collection. You may be able to refinance the loan and get extended payments, for example, which can lower your monthly payment. You also might be offered forbearance, meaning that you can temporarily pause your payments while you work to improve your financial situation. Being proactive with your debt will help you have the best options.

For Those Being Pursued by a Debt Collector

Remember: Information is power. Many people do not know the rights they have even when they have defaulted on a debt. Read up on debt collections and reach out to credit counselors. There are a lot of people out there who can help you understand your situation and assist you with making wise financial decisions. With this kind of support, you will be better able to deal with debt collectors and emerge stronger for the experience.

Author Bio: Virendra Kalani is the founder and one of the principal attorneys of OVLG, where he provides debt solutions you can trust. Mr. Kalani is a certified tax attorney with over 42 years of experience in legal research and writing. He provides financial advice on tax, debt management, business law, and estate planning.

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