Time-Barred Debts: Can You Be Sued for Your Unpaid Debts?


Do you have older debts for which collection agencies continue to contact you? Depending on the age of your debt, it may be illegal for a collector to force you to repay the debt or to file a lawsuit against you, according to the Federal Trade Commission. How does that work? In short, each state has a statute of limitations on debt collection, and after that time period has ended, your debts—even if they remain unpaid—are considered to be time-barred debts.
Each state has its own statutes of limitations, and the time period for debt collection can vary depending on the state you’re in and the type of debt at issue. In Illinois, written contracts, or closed-end credit accounts, are subject to a 10-year statute of limitations. Other kinds of open-ended debt, also known as revolving credit, are subject to a 5-year statute of limitations.  Credit card agreements are an example of open-end credit.
If you have a time-barred debt, it’s important to know your rights. However, you should keep in mind that, even in cases where debt is time-barred by the statute of limitations, this fact alone won’t prevent a collection agency from trying to collect the old debt. An experienced Illinois consumer attorney can discuss your rights with you and can help to ensure that you’re not harassed by debt collection agencies.
How Do I know if I Have a Debt That’s Too Old for Collection?
As we mentioned above, statutes of limitations will determine when a debt is too old in Illinois. When does the time period start? Is it when you first open the line of credit? In most cases, the clock on the statute of limitations will begin when you first fail to make a payment, according to the FTC.
Don’t confuse this statute of limitations with the debt reporting period for your credit report, however. The two are separate, and in most cases information about unpaid debts will stay on your credit report for seven years. In other words, time-barred debt can legally appear on your credit report, but you cannot be sued over that debt in court.
How Can I Handle a Debt Collector Who Tries to Collect Time-Barred Debt?
As we mentioned, just because a debt is time-barred under the Illinois statutes of limitations doesn’t mean that a collection agency can’t try to collect the unpaid debt. The FTC makes clear that “collectors are allowed to contact you about time-barred debts.” At the same time, however, collection agencies cannot harass debtors. Under the Fair Debt Collection Practices Act, collectors are prohibited from using any practices that could be abusive, unfair, or deceptive.
In some cases, collection companies will let you know that the debt is time-barred and that they’re not legally able to file a claim against you if you refuse to pay the money owed.
If you receive a call from a collection company about a debt that you believe is time-barred, the first thing you should do is “ask the collector if the debt is beyond the statute of limitations.” Some collection agencies might not answer your question, but if they do, it’s important to know that the law makes clear a collector cannot lie to you. If the collector won’t answer your question, you can specifically ask for the last payment date. That date will provide you with the precise moment at which the statute of limitations period began, and you can count back yourself from there.
When deciding whether to pay time-barred debt, it’s important to consider your options and to speak to an experienced consumer attorney. If you decide not to pay anything on the debt you owe, you may face repercussions, such as difficulty obtaining credit or other loans. But if you decide to make partial payments on the debt, you could end up reviving the statute of limitations. At the Emerson Law Firm, our Chicago consumer attorneys have years of experience handling debt questions and can speak to you today about your case.
See Related Blog Posts:
Debt Collection Scams Prevalent, According to Chicago Better Business Bureau

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