Q: What is going on with these debt collection agencies reviving debts that were written off by the initial account holder, yet, after somehow being either purchased or transferred to these collection agencies, they have come back to life? Some are 13 to 15 years old. First, is it legal? And if not, how do we combat this issue?
El Paso, TX
A: Debts that have been sold are still collectible in many cases. Although the original creditor might have written the debt off as uncollectable, the company can sell the right to collect the debt to someone else. Or the creditor might have hired a collection agency to still go after old debts.
That is what you see happening. The company with the right to collect the debt is coming after you. Now, here are a few things to keep in mind.
Make sure the debt is really yours. Ask for proof before admitting you owe the debt. It’s possible you paid it. And if you did, I hope you kept good records. If you agree to settle the debt for less than what you owe (and you should), get everything in writing before you send any money. If you have cash, you are more likely to be able to get the company to take less than you owe.
Let’s say the debt is yours. Still ask for proof. And check to make sure any debt that is older than seven years has not reappeared on your credit reports. Read up on the rights that you have under the Fair Debt Collection Practices Act. For example, if you send the debt collector a letter stating that you don’t owe any or all of the money, or asking for verification of the debt, that collector must stop contacting you. You have to send that letter within 30 days after you receive the validation notice. But, a collector can begin contacting you again if it sends you written verification of the debt, like a copy of a bill for the amount you owe.
The “Facts for Consumers” page of the Federal Trade Commission’s Web site has more information.
You should also check to see if your state’s statute of limitations for the debt has expired. That doesn’t mean you don’t still owe the debt or the creditors can’t come after you, but it could limit legal action that they may take, such as garnishing your wages.