Just as most of consumers in the United States have had, you may have fallen on an unfortunate situation that was out of your hands & it left you with an outstanding debt that was sent to a collection agency. Six to eight months later it is bounced to another collection agency, then another, then another, and another. When & where does this cycle stop? You are left asking yourself “when is this going to end”?

Believe it or not, debts have an expiration date. If you will, kind of like expiration dates on certain food items. This expiration date is known as a “Statute of Limitations”. This opens the questions: What exactly is a Statute of Limitations? How does Statute of Limitations help me?

The Statute of Limitations of a credit report item will keep debt collectors and even the original creditor from trying to collect on the alleged debt indefinitely. Imagine, 20 years from now, you are still receiving harassing phone calls for you to pay a debt. Before you give up & agree to pay an aged debt, make sure that the Statute of Limitations on your credit report item has not expired. If the Statute of Limitations on that debt has expired, you may not ever have to pay that old debt collection.

The Statute of Limitations for collecting a debt is the time period in which a collector or creditor can utilize the court to force you to pay. This time period starts on the date of the last recorded activity on the delinquent account. Keep in mind though, the Statute of Limitations vary from state to state.

Some debt collectors and creditors will still attempt to collect a debt even when the Statute of Limitations has expired. Their mindset is, maybe the consumer (you) has no clue about the Statute of Limitations! If you do not educate yourself in your legal right, they will try to bully you into paying them. Some may even threaten you with a lawsuit.

IMPORTANT: The Statute of Limitations can start over if you make a payment (large or small), make a promise to pay, or if you agree to setup a payment plan to pay off your reported debt.

When you do any of the following listed in the “important” message you restart the clock on the Statute of Limitations for that account or collection item. This meaning, if you only had one (1) more month remaining before the Statute of Limitations is up for your collection & you are free and clear, and you agree to any of the afore mentioned, you start back at zero. You just reset the Statute of Limitations to start all over again.

Find out what the Statute of Limitations on a credit report item is in your State, by going here.

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H & I Credit Solutions

Here is a list of what debt collectors / collection companies are not allowed to do per Federal Law.

http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre27.pdf

1. Ask you to pay more than you owe on your debt
The collector cannot misrepresent the amount you owe. [15 USC 1692e] § 807(2)(a)

2. Ask you to pay interest, fees, or expenses that are not allowed by law
The collector can’t add on any extra fees that your original credit or loan agreement doesn’t allow. [15 USC 1692f] § 808(1)

3. Call repeatedly or continuously
The FDCPA considers repeat calls as harassment. [15 USC 1692d] § 806(5)

4. Use obscene, profane, or abusive language to try to corner you into paying
Using this kind of language is considered harassment. [15 USC 1692d] § 806(2)

5. Call before 8:00 am or after 9:00 pm
Calls during these times are considered harassment. [15 USC 1692c] § 805(a)(1)

6. Call at times the collector knew or should know are inconvenient
Calls at these times are considered harassment. [15 USC 1692c] § 805(a)(1)

7. Use or threaten to use violence if you don’t pay the debt
Collectors can’t threaten violence against you. [15 USC 1692d] § 806(1)

8. Threaten action they cannot or will not take
Collectors can’t threaten to sue or file charges against you, garnish wages, take property, cause job loss, or ruin your credit when the collector cannot or does not intend to take the action. [15 USC 1692e] § 807(5)

9. Illegally inform a third party about your alleged debt
Unless you have expressed given permission, collectors are not allowed to inform anyone about your debt except the following:
•Your attorney
•The creditor
•The creditor’s attorney
•A credit reporting agency
•Your spouse
•Your parent (if you are a minor)
[15 USC 1692c] § 805(b)

10. Repeatedly call a third party to get your location information
The collector can only contact a third party once (unless it has reason to believe the information previously provided is false). [15 USC 1692b] § 804(1)

It is important to arm yourself with knowledge when speaking or handling situations with debt collection companies / agencies.

Remember, never say that the debt is yours, this must be considered an ‘alleged’ debt for validation purposes. Never get caught up into a conversation with a debt collector that you owe money to, request all communication be done in writing. The best way to communicate with a debt collector is via email or snail mail (the USPS). Remember “loose lips kill the deal” do not reveal information.

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H & I Credit Solutions

Surprisingly enough, it is not illegal to have a collection removed. The collection companies, by law, have the right to report or not report as they see fit. Having said that, let’s look at what a collection company’s main concern is.

Their main concern is to collect the debt and get reimbursed for their liability. The reason your debt is a liability is because they are unsure if they will be able to collect the debt. In return, they report the debt on a consumer’s credit file. If the main goal is to collect 100% of the debt, why would they care about anything else?

Now having said all of this, you are legally required to pay your debts. However, if the collection company cannot verify this debt and provide you with full validation of the debt they are claiming, you have the legal right not to pay until this information is validated. You have an option, you can actually negotiate your full payment, and in return they remove the collection account from all of the credit reporting agencies.

Your success may vary depending on the collection company.

If you have any questions regarding this process, please ask a professional credit analyst.

Empower – Educate – Take Action

H & I Credit Solutions