If you’ve ever dealt with a debt collector, you know how relentless they can be. They want their money fast. They may call, email, or send letters in the mail. They may even call several times a day. Ignoring the debt doesn’t work – it doesn’t just go away, but is there a time limit debt collectors must follow?
Debt Lasts for a Long Time
Unfortunately, debt doesn’t disappear. Don’t just ignore it. If you think you don’t owe the debt, put your dispute in writing. If you don’t, debt collectors can carry on with their business collecting debt. You must write to the collection agency within 30 days of receiving the initial notice to stop it.
If you don’t dispute the debt, the collectors may try to collect for up to 15 years in some states. Many companies won’t keep trying after a year, but the debt doesn’t go away. Collection companies can pick up where they left off at any point, resuming their collection activities unless you do one of the following:
- Pay the debt in full
- Settle on an agreed-upon amount
If you agree on a different amount or pay the full debt, get proof of both in writing. Keep a copy of your check or credit card statement as proof of payment.
Restarting the Statute of Limitations
Here’s the problem. Certain actions restart the statute of limitations. If you aren’t careful, you could be right back where you started.
Any of the following may restart the clock:
- Agree that you owe the debt
- Pay the debt or part of it
- Make a payment arrangement
- Discuss it with the agency and agree to pay
- Settle the account for less than the full balance
Any conversation, written or verbal restarts the clock. Even talking to the collection agency about settling the debt restarts it, as does making a payment. It seems odd since you’re doing the ‘right’ thing by paying it, but it reactivates the statute of limitations.
If you don’t pay the debt in full or in the agreed amount, they can start collection calls again. Before you talk to them, make sure you can follow through. If you agree to make payments, make sure you can make them. Otherwise, wait until you have a solid plan before restarting the clock. Once you do, you can’t turn back and collection agencies can start collection efforts again.
Collections on your Credit Report
Credit reporting agencies have different statutes of limitations. After 7 years, the collection must fall off your credit report but don’t rely on it. Keep your own records, know when the 7 years end and make sure the debt falls off or report it to the credit bureau.
Your state’s debt collection efforts may end after a few years or as long as 15 years, but do what you can to pay the debt. Unless you dispute the debt, work out an arrangement you can afford. This gets the debt off your back the right way. If your debt passes the time limit, there’s still help available, you just have to ask for it.