Does making a payment to a collection agency re-set SOL?

[Anonymous]

I recieced a summons for a 10 year old Capital One debt that I disputed a few years ago and which fell off my reports two+ years ago. They listed DOFD as early 2001 and charged it off in 2003.

I believe I made 1-2 $50 payments to the Collection Agency (before I knew that reporting could be incorrect) and then stopped (I am in NY State btw)

They are the actual plaintiff on the summons($500).

My understanding is that SOL is not re-set once charged off (i.e. only on an open account where you are in essence re-setting DOFD) and more to the point that payments to a Collection Agency under no circumstances re-set SOL.

I am trying to find case law to support this so I can put this to bed in my response, also planning on putting in a CounterClaim of $1,000 Violation of Fair Credit Collection Act.

[bakalao2k]

I believe you fell into the collection agency's trap by making those payments, thus resetting the SOL.

[Anonymous]

Not so in fact, I found this;

http://www.ncfsi.com/statute_of_limitations.htm

which shows on a state by state basis what starts the clock and what can re-set it.  In NY State Payments of any kind to anyone do not re-set the clock.  In any event my understanding is also that in states where it does, it has to be to the OC, Collection Agencies do not count.

[Anonymous]

I believe you are confusing two issues,

Here's alink from a NY consumer advocacy group,,

 http://www.nedap.org/hotline/dcbasics.html

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Can a debt collector contact me about a debt that is past the statute of limitations?

Yes.  It is legal for a debt collector to contact you about an old debt that is past the statute of limitations.  Furthermore, if you make a payment on that debt, you will reset the statute of limitations, and the creditor will have another six years in which to sue you.

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You are correct that in making a payment  the CA can't re-age the charged off debt thus keeping it on your credit report past the 7-1/2 yr time from the date the account was charged off. Which, according to your post was 2003.

However, making any payment will,, in most states,, and it appears NY is one,, reset the SOL, and in NY the SOL is 6-yrs, so the CA has 6-yrs from the date you last made a payment to them to sue you.

Message Edited by johnson_long on 03-02-2010 09:03 AM

Message Edited by johnson_long on 03-02-2010 09:03 AM

[Anonymous]

Hi, thanks, but I am clear on the difference between reporting and collection.  The quote you provide is a general one and differs from state to state.  The lin I provided was specifically about SOL as it pertains to collectibility in terms of setting/re-setting clock and as you can see, some states re-set by payments and some do not, NY being one of the latter:

State Statute / Statute (Open/Written / Beginning Date Determiner (starts the clock) / Extenders (re-starts the clock)

Indiana /  6-10 / Date of Last Payment / Payment

New York / 6-6 /  Date of Last Payment or Date of Default, whichever is later / If the borrower leaves the state to avoid service of process    So as you can see, Indiana allows for SOL re-set on payment, NY only if debtor leaves state to avoid service.

[Anonymous]

Hello,

The link I posted is from a New york City consumer advocacy group,, Not Indiana,

Their contact is,,  Neighborhood Economic Development Advocacy Project, Inc. NEDAP | 73 Spring Street, Suite 506 | New York, NY | 10012 | Telephone: (212) 680-5100 | Fax: (212) 680-5104.

They have a couple pages that warn making a payment will reset the SOL, I would think they know what they are talking about,,

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When should I NOT negotiate a payment agreement with a debt collector?

It is probably not in your best interests to negotiate a payment agreement with a debt collector if:

• You can't afford to pay the debt collector because you have a limited income, and you need it all to pay higher priority debts.  For more information on prioritizing debt, look here.
• The debt is so old that the statute of limitations has expired or is about to expire.  If you make even a single payment, you will reset the statute of limitations, and the creditor will have an additional six years to file a lawsuit against you.

• ---

You are correct in figuring I am not versed on NY consumer law,  The best advice is, You may want to consult one,

[Anonymous]

Hi, I appreciate the link and have been trying to get through, as with most low cost/free local assistance lines it is impossible to get through.  I am still not sure if the answer is generic or NY based, as I've seen there are conflicting views.

In any event I am answering the summons with a Time Barred defense, noting that the OC listed DOFD as 2001 and charged off in 2003, and that noted that the Collection Agency may not collect NOR re-set the SOL.

I also counterclaimed for $1,000 for violation of FDCRA.

This is a $500 debt.

My understanding is also that once you dispute the debt itself ie.. I dispute the debt, if it is valid I dispute that it is still valid, and if still valid dispute teh amount you remove the suing attorneys ability for a simple suit. I am hoping between the added trouble and the potential countersuit for $500 they will drop it.

[Anonymous]

This is the information I got off the BBB website:

Many debts have a statute of limitations, meaning they eventually expire and can be brought up as having passed their statute of limitations as a defense if the collector takes the alleged debtor to court and tries to sue him. Most of these time-barred debts expire between 4 to 6 years after going into default, with individual states having their own legislation regarding the exact amount of time. According to the Federal Trade Commission, however, the Fair Debt Collection Practices Act does not prohibit debt collectors from trying to collect barred debts, as long as they do not sue or threaten to sue the consumer for the debt.

It also must be kept in mind that not all debts have a statue of limitations. For instance, there is NO statute of limitations on federal student loans, most types of fines, past due child support, taxes in most cases, as well as on reporting the account to credit bureaus. The statute of limitations again depends on the type of debt and the given state's civil debt collection codes.

Consumers should likewise be aware that even after a debt reaches its statute of limitations, if the consumer makes any payment on the debt or signs a promissory note, this may reset or restart the statute of limitations. That is why it is crucial to make sure that the alleged debit is valid before making any payment. This stipulation differs from state to state, and by paying any amount of money it may renew a debt.

When confronted with questionable debt, consumers should verify their state's statutes of limitations, write a dispute letter to the collection agency within 30 days of receiving the first collection notice, keep accurate records of all correspondence, and report any violations to their state attorney general, the FTC, and BBB.

So it is best to check with your states statues.

[guiness56]

Once an account is CO, making a payment will not restart the SOL clock.

[Anonymous]

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@Anonymous wrote:

I recieced a summons for a 10 year old Capital One debt that I disputed a few years ago and which fell off my reports two+ years ago. They listed DOFD as early 2001 and charged it off in 2003.

I believe I made 1-2 $50 payments to the Collection Agency (before I knew that reporting could be incorrect) and then stopped (I am in NY State btw)

They are the actual plaintiff on the summons($500).

My understanding is that SOL is not re-set once charged off (i.e. only on an open account where you are in essence re-setting DOFD) and more to the point that payments to a Collection Agency under no circumstances re-set SOL.

I am trying to find case law to support this so I can put this to bed in my response, also planning on putting in a CounterClaim of $1,000 Violation of Fair Credit Collection Act.

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http://public.leginfo.state.ny.us/menugetf.cgi?COMMONQUERY=LAWS

At first glance, in NY the SOL is not usually reset by making payment on the debt unless there are certain other factors involved usually following the NY General Business Law or the Uniform Commercial Code. 

However, the fact is that making a payment does, indeed, reset the SOL and there is ample precedent.  Relying on a common-law tradition, the NY Court of Appeals has held “It is a long-standing common-law rule that, if part payment of a debt otherwise outlawed by the Statute of Limitations is made under circumstances from which a promise to honor the obligation may be inferred, it will be effective to make the time limited for bringing an action start anew from the time of such payment.” Roth v. Michelson, 434 N.E.2d 228, 230 (N.Y. 1982); accord In re Consalus, 95 N.Y. 340, 345 (1884).

The good news is not every judge in every county court in NY will realize this and may rely on a simple reading of the NY CPLR and determine the SOL cannot be reset.  If this happens, you luck out.  However, since the creditor has filed their action well outside the normal 6-year SOL, perhaps they are also aware that repayment resets the SOL and will be prepared to successfuly argue their case.

Message Edited by O6 on 03-02-2010 11:14 PM