Thursday, August 12, 2010

Can You Reset the Statute of Limitations on a Debt?

If there is one thing that trips people up the most about the statute of limitations on debt collection, its whether or not the time frame can be reset and, if so, when.

Essentially, yes, actions you take can reset the statute of limitations and open you up to a lawsuit once again. Keep in mind, however, if the collection agency files a lawsuit against you and you attempt to use the statute of limitations defense in court, the company will then have to prove that you did, in fact, reset the statute (more on that in a minute).

You Can Reset the Statute of Limitations on Debt By Making Payments

A debt's statute of limitations is essentially the time-clock on a dormant debt. As long as that debt remains dormant, the clock continues to tick. Should you make a payment on the debt, this "reactivates" the account. Because the debt is no longer dormant but is now active, the statute of limitations ceases to matter. If and when you once again default on your payments, your state's statute begins anew. 


Don't reset the clock!


Now, before I go any further, I will say that supposedly in some states a debtor can unintentionally reset the statute of limitations by promising to make a payment, even if he doesn't ever actually submit one. This is iffy at best. Even in a case where the state's laws allowed such a thing, the collection agency would have to provide proof that the debtor made such a promise. Granted, collection agencies record telephone calls, but the idea that they would maintain those telephone records for long enough to use them as lawsuit fodder is also a relatively sketchy concept.

Earlier today, I stumbled upon a post that absolutely disgusted me. A self-proclaimed "credit guru" who seems to be plastered everywhere I look online these days was telling some poor girl that by merely talking to a debt collector about a ten year old debt, she had already reset the statute of limitations. This, of course, is complete and utter BS. 

AAAAAAHHHHH!!!

Frustrating. In reality, it isn't that hard to look up the specific statutes for your states. Most states provide individuals access to the law codes online. 

Resetting the Time Frame on an Old Debt

If you have a debt that is owned by a collection agency yet is time-barred, send the collection agency a Cease and Desist letter and forget about it. Pull your free credit report three times a year (one every four months. It's still free as long as you don't pull the same bureau's report twice in a year) to make sure the collection agency hasn't gotten sneaky and pursued a default judgment on the sly and then leave well enough alone. You can't reset the statute of limitations if you don't take initiative to do so. 

Be warned, however, debt collectors will pull every trick in their arsenal to try and trick you into paying anything you possibly can so that you'll once again be open for a lawsuit. Don't fall for it. 

92 comments:

  1. In moment of weakness while speaking to a rude agent regarding a 13 year old debt I advised that I would rather owe them the debt for the rest of my life rather than cheat them out of it. She exclaimed, ah ha now that you have admitted to the debt the statute of limitations has been reset and she will forward it to the lawyers? I said that was BS and hung up on her. Any truth to this at all in Hawaii?

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  2. Doubtful. Sounds like either a scare tactic or a highly misinformed and eager new collector. If it were me, I'd send off a debt validation letter via certified mail within 30 days. Keep a copy of the return receipt.

    If the company DID try to sue you and couldn't prove beyond a shadow of a doubt that you reset the SOL, they open themselves up to an FDCPA violation suit from you. That's something they don't want, trust me.

    Be sure to check your credit reports and make sure they aren't trying to report this old debt. Which collection agency was this?

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  3. I'm not certain where the agent was from. I believe that night have been Portfolio recovery since they have started calling recently. When they call back I will get the name and address from them so I can get the verification letter off to them. I think the agent was just mad that she wasn't getting her desired effect from me.

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  4. The credit company keeps calling and hanging up without leaving a name. My daughter called them and they told her that she owed to a record company from many years ago. She told them she would pay if they sent her the info. Did this reset her 25.00? They wanted her credit card payment that minute and she refused and told them to send her the paper work saying she owed the money. She also does not live at this address and did not use our phone for her purchase.

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  5. Debtors should also know that making a payment or promising to make a payment on a debt past its SoL will end up resetting the SoL clock.

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  6. A conditional offer to pay wouldn't reset the SOL unless the other side of the condition is met. I would be careful and speak in "hypothetical" 3rd person.

    There are 18 states that even if you promised or even did pay, it would not reset the SOL. Read this thoroughly, http://www.creditinfocenter.com/rebuild/statuteLimitations.shtml

    Feel free to email me with questions. I've been working at this for years and would love to help others.

    Good Luck.

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    Replies
    1. Chris, I have been talking to collector for a 7 year old private student loan which is not even on my credit report anymore. We have been trying to negotiate going back and forth but never agreed to any payment terms and since our last conversation with the collection agent I did more research and found out about SOL. We have another call tomorrow and I will tell them that I can not acknowledge this debt that they cant even provide any back up paperwork about. Did I reset my SOL?

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  7. Not sure where my first post went...

    If you offered a conditional payment, it would only reset the SOL if the other side of the condition was met. You could get in a mess if the other side produced though.

    Just because you promised to pay or even made a payment, it may not reset the SOL. In some states you must negotiate a new written agreement before the SOL will reset. The SOL typically starts when you miss that first payment -or- you get a letter demanding payment in full. I like to go by, the when you first go 180 days delinquent.

    For a list of statutes describing your state's SOL legislation, check http://www.creditinfocenter.com/rebuild/statuteLimitations.shtml and do your research!

    Study, study, study.

    Email me if with questions.

    God bless.

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  8. I talked to rep on mom's behalf. He gave me details on her debt and settlement amount. I did research and found out debt is not her credit report and it's outside of SOL (2004, I'm in OR and SOL is 6 years). I've been advised to send cease/desist letter. Me talking to rep and wrote down given info doesn't restart SOL right ?

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  9. No, talking to the rep did not reset the SOL. You can send a cease and desist letter but unless you have power of attorney for your mother, the CA might not acknowledge it. You can,however, type out the C&D, let your mother approve it and have her type out her name (never sign anything to a CA, they can pull yours or your mother's signature)

    Expect the CA to sell the debt to another CA when it can no longer contact you. The C&D should give you at least 6 months of peace, however.

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  10. hi, i spoke to the collection agency and said i cant pay the $65,000 you want and also said why would i pay that if i dont have the house. Did i just restart the clock. It expired in August, i had not read that admitting restarted the clock

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  11. Saying you can't pay a debt is not an admission of guilt and admitting guilt doesn't restart the SOL.

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  12. Lots of people with no clue and no one helping.
    1) Statutes of Limitations is different in ever State for the most part.
    2) IF you make a payment ANYTIME while the acct. is in stats, you restart the clock, period.
    3) ONLY MAKING A PAYMENT WILL RESTART THE STATS - promising to pay, explaining you can't pay etc. HAS NOTHING TO DO WITH THE SOL.
    4) If the SOL is 4 years (for the sake of argument), and you make a payment on the 364th day of the third year, you've reset the stats for another 4 years.

    My question is: if you make a payment AFTER the stats have run, do you restart the stats? I've heard both "yes" and "no" from different attorneys and found this forum trying to get an answer to this very question.

    I guess I'll have to keep looking...

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    1. This comment has been removed by the author.

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    2. ***Edited for clarity***

      Yes. Making a payment after the SOL has expired does restart the SOL. People who say it doesn't restart the clock generally have the statute of limitations for debt collection confused with the reporting period for negative debt. Nothing "restarts" the credit reporting period for a bad debt. If you make a payment on the debt, however, it absolutely DOES restart the SOL.

      As a matter of fact, collection agencies often use this to their advantage. For example, a debt collector may tell a debtor she can pay $10 a month. Although the company has no intention of accepting such a low payment, it makes the offer in an effort to force the debtor into reactivating the SOL so it can sue her.

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    3. When a collection agency sells my debt to another one, does that reset the SOL?

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  13. Lee,

    Thank you for all the information. Here is my case. I called the collector, and the dates changed (By calling I re-aged the account). I did not agree to a payment or anything. I just asked for the debt and information about it, because I was not sure it was mine. Later I pulled my CR and the collector re-aged the account. I live in DE and I read online "Consumers, out of principle, will agree to make a payment on an old debt, not knowing that, depending on where they live, that can reset the statute of limitations, giving the debt collector a fresh opening to take legal action against them." I am 100% I did not agree to anything not even acknowledge, it was a simple call. Is this legal? What should I do?

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    1. Ok, don't panic. I'll explain what happened.

      When you called the company and discussed payments, the account, circus elephants, whatever, it counted as activity on your account. Thus, the collection agency updated its report to the credit bureaus based on the date of that activity. This kind of update is normal and regular creditors do it all the time. When it comes to collection agencies, however, people get confused because they assume that the last reported date they see on their credit report is the date used to calculate the 7-year reporting period. It isn't. It's just recent activity.

      The recently reported date (or any of the dates) on your credit report have nothing to do with the statute of limitations. The statute of limitations begins when you are 180 days late paying the original creditor and continues to run until it either expires or you make a payment. You didn't make a payment, so you did not reset the statute of limitations by calling.

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  14. Does it reset the SOL if I promised to pay the debt via phone? I have NOT made any payments, or signed any papers.

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    Replies
    1. That's iffy. They'll probably try and say yes, but those taped phone conversations you step into every time you call a collection agency? Those are taped so that the agency can make sure the collectors aren't making unauthorized deals or violating company policy. Sure, they may occasionally use them to entrap folks, but you're talking about a company that takes thousands of calls a day. I doubt they'd go to great lengths just to hunt down yours.

      They may make a note in your file that you promised to pay, but they can also note that the sky is purple, that doesn't make it true. Your word against theirs. If it were me, I'd wouldn't worry too much about it. As long as you haven't made a payment the SOL should still be ticking.

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    2. Hi Lee,

      Are you able to help me with a few questions regarding resetting the SOL in Alberta, Canada?

      I would much appreciate it,

      Thank you,


      Rebecca

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    3. The rules are different in Canada and I'm far more familiar with U.S. regulations but, depending on what your questions are, I can try to answer them.

      Delete
  15. Hi Lee. A 877 number called "blah blah" law office answered when I redial es a missed call. The rep on the phone said he was not a lawyer but a collector and wanted to follow up on a credit card debt. I'm in Florida and he said the last payment was in 2009 but didn't say the month. They offered me a settlement of 50% and I wouldn't budge from 40% and they were rude so I said "I could make a payment today right now but I guess you guys don't want it". Did this reset the SOL? Should I stay quiet and avoid their call until December(I'm not sure of the month of the last payment)?

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    Replies
    1. Rest easy, you didn't reset the SOL. And you don't have to just take my word for it. Copy and paste the web address below into your browser and look at statute 95.04.

      http://www.flsenate.gov/Laws/Statutes/2012/Chapter95/All

      You see that? In Florida, you must make an agreement to pay in writing before the SOL will be reset. Since the SOL in Florida is 4 years, that means you've either passed or are very close to passing it. My guess would be that the SOL is extremely close to expiring. That usually sets a fire under collection agencies. If you aren't making payments at that time they'll aggressively try to convince you to do so in order to extend the SOL.

      One warning: If you settle this debt for 40%, the collection agency is likely to turn around and sell the remaining 60% to another collector and, because you made a payment, the new collector can sue you. Since paying a collection doesn't improve your credit AT ALL and you're so close to being safe from a lawsuit, you may want to reconsider paying this debt. Unless you're buying a home and your mortgage lender requires you to pay off the account, settling this debt doesn't benefit you, it just puts you more at risk.

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    2. Which Are Th Handful Of States That Will Allow For The Sol To Reset If A Written Agreement Is Set Forth? Is This Written Agreement The One That Is Sent To The Consumer If A Deal Is Struck Without A Signature Or Does Th Consumer Have To Sign First? Is There A Way To Strike A Dea With A Collection Agency (Especially 3Rd Party) Where It Is Agreed Th Unpaid Portion Of A Settlement Will Not Be Sold?

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  16. I got a letter the other day in Spanish I had no clue what it said so I did call to make sure it wasnt important it happend to be a debit collector. While I was talkin they asked when I might beable to pay I said maybe next month I live in Maryland I know my sol is 3 years for credit card debit my last payment on this credit card was July 2010 which my sol will start in July 2013 of this year just talking to them or making a verbal agreement in Maryland does that restart the sol? Or could I just ignore them for the next couple months till the sol starts with out getting sued they just purchased the debit from the creditors in April. Im hoping I can just ignore it till july and let the sol take place? Thank you!

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    Replies
    1. Odds are you should be able to ignore it until July. Like I told Joseph below you, I'm not aware of any state that allows the SOL to be reset by an agreement to pay unless that agreement is in writing. If it were me, I'd turn the ringer off on my phone and sit tight until July. Then you can send them a cease and desist order and never worry about it again. Best of luck.

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  17. Hi I have a situation where I have a collection that comes up on my credit report and a collection agency constantly calling me I thought they were the same thing. I wanted to clear it up so I called them back (mistake 1) initially they wanted like 900 after telling them that was too much they shot it down to 502. I said I would pay when they sent me a letter that said if I pay it would be repoeted as paid in full (mistake 2). Then I proceeded to give them my correct address (mistake 3). The next day after reading all sorts of things on the net I realized my mistakes. The actual collection on my report is from an old cell phone bill which I will pay. The collection I said I would pay once I get the letter is over 10 years old and doesn't appear on my report. I didn't give them my bank info or where I work have I restared the sol if I don't pay. I also live in New Jersey if that makes a difference and it I do pay it off how long will that lower my score for. I know I did all of this backwards and I hope this helps anyone who reads this as what not to do

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    1. To the best of my knowledge, agreeing over the phone to pay a debt doesn't restart the SOL in New Jersey. Even in states that do accept an agreement to pay as a reason to restart the SOL, the agreement must usually be in writing. You seem pretty safe to me.

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    2. Hi lee I had private loans expired in 2002 all have been deleted form credit report except one that expired in 2006 I live in louisiana I spoke with a CA and promise to pay after reading up does this reset sol and can this be place back on credit report?

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    3. If your loans expired from your credit report in 2002 these are well past the statute of limitations. The same is true of the 2006 loan. If the reporting period expired in 2006, the SOL on the debt expired in 2009. So...why are you paying these again? Because they are private student loans, they won't haunt you forever the way federal loans will. They're so old, they're not even on your credit report anymore!

      When you make a payment to these folks, you're going to reset that SOL. If the debts are large (and with student loans, they often are) you run the risk of the company turning around and immediately suing you. After all, if you stopped paying the first time there is a good chance (in their view) that you'll do it again. They can't let that happen. Unless you can pay it off in one lump sum, you're in danger of a lawsuit.

      Technically, they can't report the debt on your credit report. Once it expires, its gone – regardless of whether or not you reset the SOL. If you settle the debt, however, the creditor may decide to sell the unpaid balance you thought it had forgiven to a collection agency. The collection agency isn't supposed to report a debt to the credit bureaus if the original entry has already expired, but that doesn't always stop them.

      You're risking an awful lot by paying these people this late in the game. I'm not saying don't do it, but I am terribly curious as to why you'd take this risk.

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  18. I have a debt collector calling me, trying to use scare tactics and I started doing research today about it. I printed my credit report and the debt is active as of 05/2009 but my card was from 2005-2007 and it says, "this account is scheduled to continue on my record until 2014." Does the SOL start when my debt was sold to the collection agency or when I stopped payment?

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  19. I have a question. I was called by a collections agency on a debt that is 5 years and 10 months old (I am in NY so it is 2 months away from the SOL). I was NOT aware of the SOL so I made an oral agreement that I would begin making payments the NEXT day *IF* they sent me a faxed letter outlining the payment agreement.

    After waiting all day and receiving the fax, I sent the following email. Did sending this email reset the SOL?
    ___________________________________________________________________________
    "This is regarding our conversation on May 31, 2013.

    We agreed that we would settle the aforementioned account for $750 and that it would be marked "Paid In Full" upon receipt of the final payment. We also agreed that after the final payment cleared I would receive a letter indicating that the debt has been resolved and it would be reported to all credit bureaus that I have settled and paid the debt

    I agreed to pay the $750 within 30 Days in 2 $375 installments.

    The agreed upon dates were as follows
    Tuesday, June 4, 2013
    Tuesday, June 14, 2013

    We also agreed that I could pay the settled amount of $750 faster without penalty if possible.

    We also agreed that the first payment would be given as soon as I received a Faxed (Or Emailed) Copy of the above agreement from your office.
    __________________________________________________________________

    They never actually sent the fax or the email and i never paid a cent. But did this written email RESET the SOL in NY?

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    Replies
    1. Only a handful of states extend the SOL on account of a written promise to pay. Unfortunately, New York is one of these states. The good news is that collection agencies are generally unorganized and you may be able to argue an expired SOL anyway if it comes to that.

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  20. The reporting period starts when your debt first falls 180 days' delinquent. So the 2014 removal date sounds about right. The SOL determines the amount of time the creditor or collector has to sue you and varies by state. It too, however, starts ticking on the day your debt falls 180 days' delinquent. If the SOL has expired, a quick cease and desist letter will put a stop to those pesky phone calls.

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  21. Hi Lee,

    It looks like you are the man for help! And I need some lol...

    About 11 years ago I signed up for timeshare when I was barely 18 with my friend for $10,000.00. I was very irresponsible back then and needless to say my friend and I eventually stopped making payments.

    I am a lot more responsible now and have been trying to clean up my credit when I finally ran all three of my reports today, it showed on my Equifax report that I have an open installment account with the timeshare agency with a balance of $9675.00 and a past due amount of $739.00. It says the "date opened" was 06/01/2006.

    I called the agency, (mistake) and stated some facts like verifying old addresses and the other person on the contract. I live in WA state and signed the contract in WA. Did I just restart the SOL? Do timeshares fall under written contracts?

    It seems like this should have reached its SOL regarding the debt collection of the CA and the credit reporting agency. And to add... Equifax shows my account with them as good standing for the 1st year. Does that mean my SOL started didn't start until 06/01/2008?

    I appreciate any help. I am about to graduate college and am trying to move on to a good chapter in my life trying to fix my credit in a productive way and buy a house in the next year or two.

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    Replies
    1. The SOL starts 180 days after you make your last payment. So take the day you made the last payment, add 180 days and that's the day the SOL started. The reporting period clock begins at the same time. After 7 years, the item must be removed from your credit report, regardless of whether you've made payments or not during that time period.

      You didn't restart the SOL merely by calling and talking to the collection agency. If your friend made a payment, however, that could restart the SOL on the account.

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  22. Hello Lee,

    I ran my credit report and it said that a collection was due to Fall off in July 2013. When I check it today (July 2, 2013)the collection is still there, but the comment 'scheduled to fall off in July 2013" is now gone. What can I do about this or what happened?

    My second question is: If a collection is passed the state's SOL (Hawaii 6 years), can a collection agency still report it to the 3 credit agencies?

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    Replies
    1. The best way to get it removed is to wait until August (because they can drag the removal out to the very last day of July if they wish) and pull the report again. If the collection is still there, make a copy of the previous report, highlight "scheduled to be removed July 2013," send it to the credit bureau, and as that the account be removed as scheduled.

      The SOL has nothing to do with the reporting period. The reporting period is 7 years and 180 days regardless of how long the state's SOL runs. So yes, it can appear on your credit report after the SOL expires.

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  23. My son received a letter from a law firm attempting to collect an old debt he had accrued when in college 10-12 years ago. The letter was sent to our (his parents) address where he has not been resident for over 5 years. Obviously the SoL has run out in this case.
    However, I have now found out that a letter was sent to our address 2-3 years ago regarding the same debt. My wife, his mother, thought she was doing him a favor by making payments on the debt. She made 3-4 payments. Did her making these payments reset the SoL on his account?
    Thanks

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  24. Lee, I sent you an e-mail but I'm going to re-post here since it seems to be the most relevant thread and maybe it will help someone. I took out a personal, unsecured bank loan in Arkansas 13 years ago - I do not believe a single payment was ever made due to the fact that I became disabled. In 2006, I was contacted by a lawyer about this, my husband was working, and I have a copy of the letter that I sent, promising to pay but because further attempts to contact this lawyer resulted in returned mail, I don't believe I ever actually made a payment. Even if I did, the SoL has run out in Arkansas. However, I live in Louisiana now and the way I read it, it seems that the SoL here is 10 years for that kind of loan! If they can prove that I made a payment, can they rightfully prosecute me in Louisiana? I received a court summons but it had NO date or time to appear - it simply said to 'answer' within 15 days. I was told that to 'answer', I would have to file court documents costing me almost $200. I don't have that - ever! When I did not 'answer', I received ANOTHER summons, requesting a larger amount. My original loan docs are attached to it, so they had some validation, but all attempts to physically locate this 'lawyer' who supposedly works in Louisiana have failed, again. (And yes, it's the same one). I have been mailed a default judgment. The clerk at the court listed will not confirm or deny anything! I had to do research to even find out what a judgment means. It's not like the judgment has any instructions other than "You are ordered to pay". Well, I can't. I live on disability payments that barely cover food and shelter! Is there ANY way to fix this being that 1) it's WAY past the SoL in the state where the loan was taken out and 2) It had no date, time, or place to appear in court. I feel like this is an aggressive, belated, extremely confusing, and possibly fraudulent persecution of a disabled person who can't fight back. Any ideas? (I know, it's not advice). Thanks!

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    Replies
    1. Madison,

      I need the approximate date that you stopped making payments, the date the judgment was issued and the date you moved from AK to LA before I can try to help you figure out how to navigate this mess. I apologize for missing your email.

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  25. I have an account in collections from HSBC. It's been transferred twice now I think. I just got a letter from Mercantile Adjustment Bureau bought it from Main Street Acquisition trying to collect. I'm in MD and the SOL is 3 years. The last payment I made was 12/09. So if the SOL started 6/10 hasn't it passed the date they can pursue me? Also, because the debt has changed hands so many times should I request debt validation or would that restart the SOL? I also read that sometimes credit card companies will use the state they are in for the SOL time rather than the state I'm in. How do I find out which time frame they're going by? Thanks! -Jessie

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    Replies
    1. The SOL limits the amount of time they can SUE you or threaten to sue you. It does not limit the amount of time they can pursue payment for the debt. They can pursue payment indefinitely. Sending a debt validation letter does not restart the SOL. The SOL begins 180 days after your last payment. Your debt is no longer with the credit card company, its with a collector and they must adhere to your state's SOL.

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  26. Hi Lee,
    My short sale in CA closed in July 2009. The first loan settled and the credit report shows closed (falls of 2015). On the other hand, the 2nd loan although it did received a small partial payment is still going after me for full amount. The 2nd loan HELOC became unsecured debt. The debt is passed SOL of 4 years for CA.
    I talked with a financial management and inquired how to remove the first and 2nd loan from my credit report while pointing out SOL of 4 years in CA. The adviser mention that the collection agency can reset the time barred on credit report once it is near the fall off date of 2015.
    Can they do that, without me making payments or contact?
    Hope to get more enlighten on this topic.

    ReplyDelete
    Replies
    1. You're getting the SOL and the reporting period mixed up. The SOL is the amount of time a creditor has to sue you, NOT the amount of time the debt remains on your credit report. Your HELOC can only legally remain on your credit report for seven years from the day the debt first became delinquent by 180 days--unless its a judgment. Now, if your financial advisor said they can reset it once it reaches the expiry date, that means the debt is probably a judgment. This means they have already sued you and likely obtained a default judgment against you when you didn't show up to court. Judgments carry a whole different set of rules. Judgments in CA stay on your credit report for 10 years and, if I remember correctly, can be reset twice. If the debt is just a debt and not a judgment, it WILL fall off after seven years and 180 days and it cannot legally be reset.

      The SOL differs from the reporting period in that it is the amount of time a collector has to sue you. You can reset the SOL at any time--even if its already expired--simply by making a payment.

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  27. I have a credit card debt back from 2006 in the state of Arizona. Now I know open end accounts SOL in AZ is 3 years. However they sent a letter to my parents address and my Dad called them up and said I would repay them because he didn't know the full details about it. Did that reset the SOL from my dad talking to them about me repaying it? I just recently got a letter from a Law Firm and if they decide to sue me, im not sure if my SOL was reset or not?

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    Replies
    1. No, your dad didn't restart the clock. Look this up to be certain, but I believe Arizona is one of the small handful of states in which even making a payment doesn't restart the SOL. You'd have to provide the collection agency with a written notice of your intent to pay before the SOL restarts. And tell your Dad to stay out of this. I can't tell you the number of times I've seen well-meaning parents talk to collectors on behalf of their children only to have the situation get much worse on the kids' end.

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  28. Hi lee, I had a mortgage from 2006 till my ex wife and split in april 2008. My last payment to the company was in march 08.we short saled, the house last year. I just checked my report monday, not only is the company still reporting it but there are two reporting it. Litton and ocwen. I have not stepped foot in that house since april never mind pay the mortgage. But ocwen and litton have me, making payments all the way into nov 2011, on time litton has me on time to a point.then missing a bunch of payments then paying again which I did not make how legal is this? Do I have any recourse to fight this. I also have the dishcharge letter from the probate court.

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  29. Hi I'm in California, I missed payments for a silly overdraft fiasco and went to collections in early 2011. The charge-off amount was roughly 1.5k. (Now it's 2k) First deliquency in September 2010 and last payment July 2010.

    So the SOL goes into effect in January 2015?

    Is it worth it sending a Pay for Delete letter? (I'm thinking about offering $1000) I'm a young guy and have had three other credit cards since 2006 which are in good standing.

    Thanks

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  30. Hi Lee,
    I got a letter from a Debt Collector saying I had an debt for $2,700 on an old AT&T family plan. I talked to a representative but did not agree to any payment. Did I restart the SOL? Thanks!!

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  31. Hello! I have a question regarding a Convergent CA coming after me for a debt that I am nearly certain I paid off in full 3 years ago or more and has NEVER appeared on my credit report. I first got the letter yesterday telling me that I could settle for $100 of the $158 total I supposedly owe to Comcast. How should I pursue this if it has never appeared on my report? Should I send them a DV request or ignore this all together? The debt originates from 2009 in the state of SC.

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  32. Does getting a default judgement on a debt restart the SOL?

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  33. I have a question about them proving payment. We claimed a debt was time barred due to the SOL. They are saying there was a payment made a few months after the account was closed. We questioned this and they provided a printout with name and general info and a payment amount but no check number or anything. Does this constitute a proof of payment or does it need to be a copy of check or how should we proceed from here?

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  34. Hi Lee,

    This seems to be the best site to get any useful information. I live in Florida and on my 18th birthday (2008) I was admitted to the emergency room. At the time, I supposedly had Medicaid but somehow they were not charged and the bill was forwarded to me. Years later, seeing this appearing on my credit report, I disputed the items. By disputing these items, did I in fact revive SOL? Also, with my future career path, I need to have a clean financial record. My other question is that if the SOL has indeed passed and these items fall off my credit report after 7 years (2015), will this be picked up on a government credit check? Or how can I go about settling this without being sued for the rest and reviving the SOL?

    ReplyDelete
    Replies
    1. I know this was in January, but hopefully you'll still be notified of my reply. Sorry about that. Anyway, you did not restart the SOL by disputing the debt, and once the items fall off your credit report, no credit check is going to pick them up--not even a government credit check.

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  35. Hello Lee,

    I have several accounts that have met the SOL dates in TEXAS. Does requesting a validation letter on these account restart the clock?

    Also, I have a charge off account that has been sold several times to different collection agents. The original account is over 10 years old and shows up on my Experian report with a balance. Should I request for a validation letter from the collection agency, or dispute the account with the credit bureau?
    Thanks,

    ReplyDelete
    Replies
    1. Requesting validation does not restart the SOL. And if the original credit card charged off that debt more than 7 years and 180 days ago, any evidence of it on your credit report is obsolete and you have every right to dispute it as such.

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  36. i just called a collection agency to pay off an old debt of $152.Then after I paid that one off the agent told me that there was some other old accounts that I know where way past statue of limitations .I just told the guy that I dont recall any other accounts and I just called to settle the one for $152 and just hung up.My question is from me calling only about the $152 account can they restart those other accounts that they said they had?

    ReplyDelete
    Replies
    1. Nope. Calling doesn't restart either the SOL or the credit reporting period.

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  37. Lee is gone. :(

    ReplyDelete
    Replies
    1. I was gone for a couple of months, yes. I've had a series of spinal surgeries that have made it rather difficult to sit and do anything on a computer. But I've recovered enough now to try and keep up with this blog. Unfortunately, answering all of the 600 and some odd comments/questions I got while I was gone is going to take some time.

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  38. I have been contacting by an attorney threatening suit if I do not pay. It has been over six years since the account first became delinquent. After many financial hardships....I have been unable to pay. They asked me to put this in writing. In the email...I did not promise to make a payment....simply asked for relief in this matter because of financial hardship. Did I just reset the SOL clock even though I did not make a promise to pay? I understand in Arizona it you put something in writing you are...?

    ReplyDelete
    Replies
    1. Here's why they want it in writing: Arizona is special. In Arizona, just making a payment isn't enough to restart the SOL. In order for you to restart the SOL so they can sue you, you have to provide the collector with a promise to pay in writing. That's why they want you to send them the agreement in writing. Only that written agreement restarts the SOL. You can pay them till the cows come home but without that paper, as long as the SOL is expired they can't touch you.

      So...if it were me and I felt an overwhelming moral obligation to pay, I would do so. But in my opinion it would be akin to MADNESS to send them a written promise to pay and, in doing so, restart the SOL and give them the right to sue.

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  39. A collection agency refiled an SOL debt (It has been SOL since 2011) and reported this to credit bureaus as a new debt. They then sold the new debt to another collection agency. Is this legal?
    Mike

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    Replies
    1. The SOL has nothing at all to do with the credit reporting period. The SOL is merely the amount of time a collector has to sue you in your state. It's generally several years shorter than the credit reporting period, which lasts seven years and starts when you first fall 180 days behind on the original debt.

      It's very common for debts to appear on your credit report even if the SOL has expired. It only becomes illegal if the debts appear on your credit report after the credit reporting period expires.

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  40. Can you reset your sol my making an online account with one of the collection adegencies? I did it just to see who the original creditors were. I have not made or arranged any payments. The accounts were opened in ga. I do believeveither this year or next is the end of the 7 year period.

    ReplyDelete
    Replies
    1. No, you cannot reset the SOL merely by making an online account. And the SOL for Georgia is four years, not seven. Perhaps you're getting that confused with the credit reporting period, which is always seven years.

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  41. The conpany that has the debt now id midland mcm. I sure hope i did not reset my sol for making an account.

    ReplyDelete
  42. Thank you lee so much. Would you happen to have a facebook page?

    ReplyDelete
    Replies
    1. Yes and no. I know I should probably make a Facebook page for this blog, but I keep putting it off. :)

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  43. Hi Lee,

    I have two negative reports on my credit report, they are both supposed to fall off in 2 years. I made the mistake of calling both collection agencies, and agreed to make payments in the next couple of months. I can certainly pay them, however, I am worried that paying the full debt may reactivate the 7 year negative credit history.

    Can agreeing to pay the debt restart 7 year negative history? These accounts are so old, I have no record of any paperwork, and no one can seem to tell me the exact date of first delinquency.

    Should I just pay the full debt, have them agree to report to credit bureaus as 'paid in full?' Will this help my score and to have it removed from my report when the 7 yrs is up?

    Thanks for any advice you can offer.

    ReplyDelete
    Replies
    1. Jenny, my reply to you would have been too long for the comments section. I have turned it into a Q&A post. This is also beneficial for other readers since you aren't the only person out there getting the SOL and the credit reporting period mixed up. Please copy and paste the web address below into your browser for your Q&A post.

      http://collectionagencydebt.blogspot.com/2014/08/q-does-agreeing-to-pay-collections.html

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  44. Hi Lee,

    I incurred some debt 2011. I'm in MD and in 2013, I received a letter from a debt collector. I made 4 payments on the debt. Our SOL of limitations is 3 years so normally it would have expired by now but I think I reset it when I made payments...am I correct?
    Thanks

    ReplyDelete
    Replies
    1. Yes, you are correct. I'm sorry.

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  45. Hello Lee!
    I have a questoin about a creditor suddenly sending me a collections notice. the company is "convergent healthcare recoveries". About a month ago i paid off everything that was on my credit report (i was trying to buy a car) and to fix my credit in general. There were NO medical bills on my credit report anywhere. Now, id say at least 10 years ago I had to go to the emergency room when i was uninsured as a 20/21 year old. I havent received any letters, phone calls any kind of contact for anything medical in longer than I can remember. They say they will settle for half of what i owe, which says it is $465. There is no record on there of when it was sent to them or what the bill is for. Should I request they send me further documentation, or send a cease and desist order because I am 100% positive it is way past the SOL. I live in Florida currently and if it was for medical expenses i was living in MA then. What should i do and what can they do? are they able to put this on my credit report, and if they do after the SOL has passed what can i do about it?

    any feedback would be amazing!!!
    thank you so much
    jen

    ReplyDelete
    Replies
    1. Jen,

      Legally, they can't insert this information on your credit report. The credit reporting period is seven years and 180 days. Your debt is well past that. Just the same, if I were you I'd keep an eye on my credit reports. Collection agencies aren't exactly known for following the rules.

      You're right about the debt being beyond the SOL, so you can send them a cease and desist letter without fear of an immediate lawsuit. Because the SOL has passed, its illegal for them to so much as threaten to sue you. If I were you, I wouldn't worry too much about this debt. I'd just send a C&D and be done with it.

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  46. Hello Lee!
    I have a questoin about a creditor suddenly sending me a collections notice. the company is "convergent healthcare recoveries". About a month ago i paid off everything that was on my credit report (i was trying to buy a car) and to fix my credit in general. There were NO medical bills on my credit report anywhere. Now, id say at least 10 years ago I had to go to the emergency room when i was uninsured as a 20/21 year old. I havent received any letters, phone calls any kind of contact for anything medical in longer than I can remember. They say they will settle for half of what i owe, which says it is $465. There is no record on there of when it was sent to them or what the bill is for. Should I request they send me further documentation, or send a cease and desist order because I am 100% positive it is way past the SOL. I live in Florida currently and if it was for medical expenses i was living in MA then. What should i do and what can they do? are they able to put this on my credit report, and if they do after the SOL has passed what can i do about it?

    any feedback would be amazing!!!
    thank you so much
    jen

    ReplyDelete
  47. Hello, I need help.

    There is a local collection agency here in Waco Tx. that I have 5 hospital accounts with. 4 debts fall off in 1 year.

    My question is, one of my accounts is only 2 years old with them and is under $200. I would like to pay off that one account. If I contact them and pay off that one account will it restart the other 4 accounts 7 year countdown?

    To be clear, how can I pay off only one account to a debt agency without renewing other accounts?

    Please help as I am trying to fix my credit and this is the last one I need to pay.

    ReplyDelete
    Replies
    1. Well, for starters, the statute of limitations in Texas is four years, not seven. The seven-year period you're referring to is the credit reporting period. Nothing you do is going to restart the credit reporting period. That seven years is set in stone.

      Now, making a payment does generally reset the SOL, but you're in Texas. In Texas, there are heaps of case law supporting the fact that making a payment is not, in an of itself, sufficient to restart the statute of limitations. This means that you should be able to pay whichever account you wish without having to worry that doing so will restart the SOL on the other accounts. If you'd like to look into this for yourself, google Gabriel v. Alhabbal or Mandola v. Oggero.

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  48. Hello Lee,
    I hope you can help me here. I called a collection agency to inquire about a debt I have settled and asked why this was not reported to the credit bureaus and they said they did even if my Equifax still shows it as unpaid. then they asked to talk about another account and I was surprised. It is an old account from 2005 that was not showing on my CR and my first reflex was to say I have no knowledge of this and she kept asking if this was my mine and still said I have no knowledge of it. can they use this to restart the SOL?

    ReplyDelete
    Replies
    1. The reply to your question was longer than I can comfortably put in a comment box, so I made it a Q&A post. Just copy and paste the URL below into your browser.

      http://collectionagencydebt.blogspot.com/2014/08/q-collection-agency-not-updating-credit.html

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  49. Lee.

    I received a letter from IRS Stating that i owe taxes on a charge off account from bank of america. this was a car that was repossesed back in 2007. it was under my husbands name. I called the bank they transfered me to collection dpt and they told me that they sold the car in an auction and thatmy husband had to pay for a deficiency....i told them we did not recived any documentation back then.(i called in behalf of my husband) and that i want a copy of the aiction sales. the car was fairly new when they took it. i al afraid that this call will restar SOL. I live in florida. please if u can give me an advice. thamk u so much

    ReplyDelete
    Replies
    1. Any time a creditor writes of a bad debt, they get a tax break on whatever amount you didn't pay. They are supposed to send you a MISC 1099 if the amount they wrote off exceeds $600. You are then required to include that amount as income when you file your taxes. The rationale is that if the creditor gets a tax break on it, you have to "repay" the IRS for that tax break. If this was a car repo, then the amount probably exceeded $600 and you should have received a MISC 1099. You owe the IRS now, not the original creditor. Thus, the standard SOL doesn't apply. Unpaid IRS debt has a SOL of ten years from the date the debt was originally assessed, not the date that the car was repossessed or the date you defaulted on your payments.

      Owing the IRS is serious business. If you can't make arrangements to pay, consider consulting with a tax attorney in your area. They can help you fill out an Offer in Compromise to lower your total tax liability.

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  50. So I received a call from a an collection company for an old comcast from 2009 I told thw lady I spoke with that I needed to speak with my husband before setti g up any payments to see how much I could afford and on months that I can pay more I would and that I would call her back I the. Called back and spoke with a man and told him that I was working with a credit repair company and that I was not going to set up payments or promise payments or any payments that I had no plans to pay this off at all. Im in utah did I reset the time clock?

    ReplyDelete
    Replies
    1. Here's the issue I see: Utah law is pretty tricky when it comes to the SOL. Utah specifically stipulates that any signed agreement in writing is subject to a six-year SOL while "open" accounts are subject to a 4-year SOL. That means that, while debts such as credit cards are considered "open" debts in most states, Utah considers these "written" accounts. I highly doubt that your Comcast debt could be considered anything other than an "open" debt, but I wanted to make you aware of the issue just in case.

      If was assume that your debt falls under Utah's "open" SOL, then the SOL has already expired and the debt is time-barred. Utah is one of the handful of states that requires a signed agreement to pay before the SOL restarts. So unless you signed a document agreeing to make payments on your old Comcast debt, the SOL is still in effect.

      Keep in mind that if you want these calls to stop, all you have to do is send the collection agency a Cease and Desist order in writing. Also, Utah requires collection agencies to be both licensed and bonded. So if you run into any trouble or legal issues down the road, that may serve as valuable ammunition against the collector.

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  51. Hi lee
    Its the utah comcast girl again once I send the new debt collectors a cease and desist letter how do I get them to stop reporting this debt on my credit report?

    ReplyDelete
    Replies
    1. Technically, you don't. The debt itself is legitimate and that means the collection agency has the right (some would say the responsibility) to report this debt in an effort to warn future creditors from doing business with you. On the bright side, paying it doesn't result in them removing it either, so at least you didn't throw money at them in the hope that they would remove the debt.

      You are free to dispute any debt on your credit report and request an investigation. You are also free to add a personal statement to your credit report explaining the collection to any future lenders who review your report. Otherwise, the debt should fall off on its own in 2016. Keep in mind that the older the collection is, the less impact it has on your credit scores.

      If you're ready to take on anything in order to get this collection off your credit report, try Kristy Welsh's method of verification trick. It's complex, but it DOES work. Just copy and paste the URL below into your browser:

      http://www.creditinfocenter.com/repair/methodofverification.shtml

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  52. Hi Lee.
    I attended a state college in Illinois and graduated in 2004. I did receive my degree and went on to graduate school, however I left school before the first semester of graduate school reached it's 2nd month. In 2013 I called the school to request transcripts so that I can continue my education, at this time I was informed of a hold on my transcripts in the amount of $ 6.000, I never knew in all these years that I owe this school anything it never even showed up on my credit report. When I asked what the charges was for I was told that when I left school money had went back to the government leaving me with a balance that I owed for housing, and several other charges listed (which I know for a fact are incorrect) Being that the alleged debt occurred in 2005 the year that I left grad school and it is now 2014, I was wondering if there is a statue of limitations on debt owe to a state college. I am currently paying back student loans, my transcripts are being held not because of student loans but because of charges issued from the university itself. And also did I re-set the SOL just by contacting the bursars office and discussing my account? I want to mention that I was told that the debt was written off.
    Thank you in advance for reading my post.

    ReplyDelete
    Replies
    1. You did not reset the SOL just by calling and asking about your debt. The college is a commercial creditor, so the statute of limitations is the same as it would be for any other commercial creditor, such as credit card companies or collection agencies.

      The length of the SOL will vary depending on the type of debt you owe. I don't know precisely what type of debt you owe since the only debt you've mentioned directly is housing. Now, that could be considered a written or open-ended account. That also varies by state. So the SOL for your debts could range anywhere from five years to ten years, depending on how they're categorized in Illinois.

      These debts wouldn't appear on your credit report anyway. They're too old. Commercial debts only show up on your credit record for 7.5 years and obsolete debts cannot be reinserted. If the SOL is still in effect, however, the school can sue you and the resulting judgment would appear on your credit report and damage your scores. A judgment isn't obsolete just because the original debt is.

      This probably would have timed out on its own (because even if your SOL is the full ten years, the account would still expire next year) but calling a creditor often renews their interest in collecting the debt. So if you receive any official looking paperwork, don't throw it away. It may be a summons.

      You can probably get copies of your transcripts via a Freedom of Information Act request (whether this is allowed for education transcripts varies by state) but they will be unofficial transcripts. You'll need official transcripts before you can re-enroll in college. I do not know whether or not the college will give you your official transcripts after the SOL expires. It's not likely, but its certainly worth a shot.

      Best of luck,
      Lee

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