@delaney1 wrote:This is the type of thing I’m afraid will pop up when DH and I go to apply for a mortgage. I wa thinking we’d do a test mortgage, but was advised here I don’t need to since mortgage scores are in 760-780s or so.
So, we are contacted probably once a year regarding this debt from 2012. There is nothing on DH’s credit report concerning this collection. They always state due to SOL we can’t be sued. Should I contact them and tell them to stop with the letters? Confused!
The debt collector can’t win if they sue you if a debt is past the statute of limitations, which differs from state to state and by debt type. It usually begins when you first miss a payment on a debt.
Whenever that period is over in your state, the debt is considered "time-barred." Keep in mind that because the statute of limitations has passed doesn’t mean creditors can’t try to collect on time-barred debts, it just means that they can’t sue. If it’s not too old, that negative information may also stay on your credit report, typically for seven years.
If you do get sued for a time-barred debt, don’t ignore it or the judgment could go against you. Show your debt verification, and show your proof of your last payment.
As Medic981 said, a creditor can continue to attempt to collect on a debt even after the statute of limitations has passed.
If you want them to stop contacting you, you'll need to satisfy your debt (pay them).
If the debt is truly as old as stated, you are unlikely to see it reappear on credit reports.
If you are applying for a mortgage in less than 6 months ignore the debt until after you're in the house.
If you aren't going to apply for 12+ months clear the debt up (pay in full or try and settle for less <-- make sure to get settlement offer in writing before paying anything to avoid restarting the statute of limitations).
Best of luck with your journey.
If you want them to stop contacting you, you'll need to satisfy your debt (pay them).
If the debt is truly as old as stated, you are unlikely to see it reappear on credit reports.
If you are applying for a mortgage in less than 6 months ignore the debt until after you're in the house.
If you aren't going to apply for 12+ months clear the debt up (pay in full or try and settle for less <-- make sure to get settlement offer in writing before paying anything to avoid restarting the statute of limitations).
Best of luck with your journey.
@delaney1 wrote:
Thanks! I understand now. I was under the impression that if a debt is outside SOL then legally they can’t contact you.
Sounds like you have what is called zombie debt. Debt that you thought was in the grave and is trying to live again. Zombie debts still have some value, and while the original creditor may no longer find it worth their while to try to collect, Zombie Debt Collection Agencies (ZDCA) do. Uncollectable debts are often sold for pennies on the dollar to debt collection companies, even if the SOL on the debt has passed.
Since the ZDCA pays so little for the debts they acquire, getting paid on even a fraction of the debt owed makes for a profitable business model. Most companies that buy uncollectable debts pay about 3% of the face value of the debt. So if the original debt was $1,000, the ZDCA pays about $30 for it. If the ZDCA can get just one person to repay a $1,000 debt in full, that covers costs to purchase more than thirty similar zombie debts and the cycle continues. Zombie debt can be sold over and over again.
So if someone pays a Zombie debt for a fraction of the original debt or even full price...
Would that debt become reportable again?
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