Statute of Limitations and Validation

[Anonymous]

I am writing in regards to an account that I have.  It was recently removed from my credit report (2006) and I was recently contacted by a collection agency(3/8/2007) trying to collect on the debt.   I was advised to send a Letter of Validation to this collection company.  One of the concerns I have is the statute of limitations.  I live in Oregon and the Statute of limitations is 6 years.  I am not sure what date to use to determine when the statute start.   On the reports I got from Suze's site I have a date of status December, 2000 and a last payment date of January, 2000.

Any help that you can provide will be helpful.

Thanks!

[Anonymous]

This what you ca;; zombie debt.  Sometimes after the statute of limitations (which you have passed) and the date that an item ages from the report.  Zombie debt collectors will try and strong arm you into paying it.  If this is the same debt, let them know that it is beyond the statute of limitations and that the date has also passed the 7 yr credit reporting timeline as set forth by the FCRA.  Let them know if they continue to contact you, or if this item is reentered on your credit report, you will take action through the FTC.  I would go ahead and contact the FTC because these guys will try to strong arm anyone to collect money that is for all intents and purposes uncollectible and will go as far as entering it on your report since the bureaus have no record of it being there before.

Make all comunications certified.  Keep a copy of whatever you have that shows this was on your report and the DOLD, it could come in handy.  I would also let them know that you have this proof.

[Anonymous]

What if you were dumb enough to go ahead and start making payments...can you stop them or did you restart the clock?

[Anonymous]

Send the letter anyway (soon). They can't collect until they validate, and if they do validate, you'll know for sure if it's out of SOL or not.

When the SOL starts is usually (in most states) on the date of breach. So if you paid in January and missed a payment due in February, it'd start the day after that due date. You should be okay if your credit report dates are accurate.

[Anonymous]

As far as re-setting the clock, that's state-dependent. There's no easy answer, unfortunately, not even in a given state.

[Anonymous]

It is my understanding that if you set up new payment arrangements you have entered into a new contract per your agreement and your SOL begins on the date that new agreement is violated.  Barry?  Anyone??

[Anonymous]

In most states, setting up payment arrangements in writing will restart the SOL. In some states, setting up an oral payment arrangement will. In some states, making a payment at all will.

It all depends.

[Anonymous]

So another silly question but should I still send them the validation letter or should I call them, etc.?  The validation letter asks them to look into the Statute of Limitations but it does not ask to look into the seven year clock.  This is really freaking me out I have work so long and hard to get me FICO score above a 600 I can't afford to lose 50 points.

Please help 

[Anonymous]

*********** This is not legal advice ************

Just to clarify - statute of limitations for collection and enforcement legal action most often fall under state laws while reporting to credit bureaus most often fall under federal law.  So, you may wish to read your state's statute of limitations on debts, any of your state's fair collection laws, and the federal Fair Credit Reporting Act (15 U.S.C. 1681). 

Here's where it gets fun - payments on an old debt CANNOT and WILL NOT restart ANY clocks with regards to reporting to credit bureaus.  (Skiffy is right about state law - so check your state law for how payments might affect legal enforcement, but that usually won't change either)

You have a very common and typical problem.  These second rate collection agencies buy old debts for pennies on the dollar.  If they can sucker you into paying anything then they most often make more than their money back.  They will threaten you with all kinds of crazy stuff and WILL renew the date of the debt on your credit reports in an effort to make you pay.

I totally agree with Brammy - file a complaint with the FTC and send the collection company a copy of your complaint.  DO NOT sign any re-affirmation agreements or you may be entering a new contract to pay back what is otherwise an unenforceable debt.  Payments alone will not reset any reporting dates - regardless of what some collection agent tries to tell you.

I have personally spoken to the FTC Attorney who handled the NCO Financial Systems, Inc. case where the FTC fined NCO Financial 1.5 million dollars for the same games.  The FTC has made it clear that the reporting clock starts at the moment the debt is first reported as delinquent to credit bureaus.  The FTC is very clear about the fact that subsequent payments on an old debt will NOT restart any FCRA reporting clocks.  So, if you have not signed any re-affirmation contracts agreeing to pay the collection agency then you may wish to challenge the trade lines with the credit bureaus and file a complaint with FTC.

You can also write a cease and desist letter, hire an attorney to sue them, and all kinds of other fun stuff.  Nobody should tolerate that kind of illegal activity.  The collection agencies do it because very few people are familiar with how the state and federal collection and reporting laws work.  So, if everyone stood up for themselves this type of activity would stop.

************* This is not legal advice ***************

Message Edited by DionLawOffice on 03-28-2007 09:52 AM

[Anonymous]

DionLawOffice, thank you SO MUCH for the info!!!  I've gotten so much conflicting info.  Let me get this straight...I don't know if I want to go through the trouble of sueing, I just don't want to pay any more money.

1. I can write a cease and desist letter to NCO now, telling them the debt is past the SOL and they have no right to collect under the FCRA (or whatever it is).  Put a stop payment on the stupid, stupid bank draft.

2. File a complaint with the FTC (or whatever it is, can't look back at posts while I'm typing) and cc NCO.

3. This will stop collection action and I can go on with my life with a clear conscience.  The OC sold the debt so they have at least some of their money and their not seeing my payments anyway.  NCO has more than profited after 2 years of payments.

Sorry to hijack your thread, newjbw!