Checking Account Charge Off

[Anonymous]

I recently received a call out of the blue from a collection agency. They state my old WAMU account was closed in 2000 and charged off due to an outstanding balance. I had no knowledge of this and this debt does not appear on my credit report. I did request proof of the debt. They offered to cut the debt in half if I pay now.

1. I understand they can always request the debt to be paid, but legally can they do anything to me? It is over 12 years ago according to the agent. The debt and my residence is in California.

2. By requesting proof, did that restart/renew the debt? Thus is will show on a credit report, even thou it never showed before.

Thank you for your help.

[HoldingOntoHope]

Hello and welcome to the forums. You are correct in that they can attempt to collect on the debt no matter the age. As long as it remains unpaid then an attempt to collect is legitimate. To answer your other questions:

1. They cannot do anything in the legal sense such as a judgment. In the event they were to try and file a suit against you then your defense comes from the Statute of Limitations on the debt. They are barred from a legitimate lawsuit. This does not mean that some shady collection firms have not tried this tactic, so if you ever receive notice of a lawsuit then you must respond to assert your defense.

2. Your request for proof of the debt did not reset any time lines in the state of CA. If your request was simply verbal then I do not know if it holds any weight under the FCRA rules. If you initiate a written request for validation of the debt then they must cease all collection efforts until they respond. They are also supposed to provide you written notice of their collection within five days of their first collection effort (such as a phone call). Again they may or may not comply with this depending on how shady a collection agency they are.

3. They are barred from reporting a debt this old to the credit bureaus based on reporting period exclusions. The maximum time for reporting collections is 7.5 years fro the date of first delinquency which in this case would be the date your account went to a negative balance and was never brought current.

If they attempt any of these actions you do have recourse in suing them for civil damages under the FCRA. I am not well versed in that area but if anything happens you can post again and one of our resident experts will quote you the code section numbers and the process to sue them.

[Anonymous]

Thank you for the welcome and reply.

- Since they can always request for the debt to be paid, does that mean there are no options to stop the phone calls from them?

- It was a verbal request to provide me with proof of this debt.

[RobertEG]

You have two ways to prevent further calls.

First is to send a timely DV request, which places a total cease collection bar on them.  Any DV will be timely if they have not yet sent dunning notice.

That bar includes any communications with you, and remains in effect until they provide the requested debt verification.  If you choose the DV route, their is no current need to send a cease communication letter, as a DV does that and more.

Second, you could forgo the DV and simply send a cease communication letter under FDCPA 805(c).  That is permanent, but only extends to communications with you.

With the age of the debt, and if you are sure that your SOL has expired, they are not free to bring legal action if they are also aware of expiration of the SOL.

There is a body of federal case law holding that the bringing or threat to bring legal action by a debt collector on a knowingly time-barred debt is a violation of the FDCPA, providing basis for a counter-suit on your part.

I suggest you send an immediate DV.  If they verify, which is highly unlikely, then shoot off a cease communications letter.