Learning More About Time-Barred Debts

What is a time-barred debt and how can it help you, as a consumer, to know more about this topic? According to a recent article from the Federal Trade Commission (FTC), it is extremely important for consumers to know more about time-barred debts and actions a debt collector cannot take with regard to these types of debts. In short, time-barred debt is a debt that is “too old for a debt collector to sue you to make you pay.” Debts have a lifespan, also known as a statute of limitations. After that time period has run out, a collector cannot take action to recover that debt from you. Each statute of limitation varies depending on the state. In our state, debts related to written contracts have a 10-year statute of limitations under Illinois law (735 ILCS/5/13-206). However, credit card debt and other forms of debt may have a short, five-year statute of limitations.
The FTC provides some important points for getting to know more about time-barred debt and your rights as a consumer.
What You Should Do if a Collector Contacts You About Time-Barred Debt
If you believe the statute of limitations has run out for a debt collector, that fact alone does not mean that the collector cannot continue contacting you. Debt collection companies and debt-buyers are permitted to contact you at any point about a time-barred debt. However, those collectors cannot threaten you or tell you that you will be sued if you cannot pay the debt.
When a collection company contacts you about a time-barred debt, you should take the following steps:
  • Ask for the date of your last payment.
  • Ask the collector to provide you with a validation notice. This is a letter that is required by law which includes the amount of money you owe and the creditor to whom who you owe the money.
  • If the collector provides you with a validation notice, you should reply within 30 days. Your reply should emphasize that you are disputing the amount owed and that “you want to ‘verify’ it.” A debt collector cannot continue to contact you until it provides you with verification.
  • If you do not receive a validation notice but continue to receive phone calls from a debt collector, you should contact an experienced Oak Park consumer protection lawyer to learn more about your options.
What You Should Do if You are Sued for a Time-Barred Debt
Just because the law does not allow a debt collector to file a claim for a time-barred debt does not mean that you should ignore documents that indicate you are being sued. A Chicago consumer protection lawyer can help you to prove that the statute of limitations has run on your debt so that the lawsuit can be dismissed.
Know that You Have Options When it Comes to Time-Barred Debt
You have several options when it comes to handling a time-barred debt. The FTC highlights three different roads you can take in dealing with money you owe on which the statute of limitations for a lawsuit has run out:
  • Do not pay the debt. It is important to know that failing to pay a time-barred debt can hurt your credit score, and debt collectors can continue to contact you about the money you owe. “Although debt collectors can no longer sue you for a time-barred debt, it won’t make it go away.”
  • Pay some of the debt. Before you make payments on a time-barred debt, you should discuss your situation with a consumer protection lawyer in Oak Park. Depending on the details of your case, making partial payment (or even promising to make a partial payment) can reset the statute of limitations, and the creditor may be able to file a lawsuit against you to recover the money owed.
  • Pay off the entire debt. By paying your debt, you can help to ensure that you will not be contact by the debt collector. Yet it is important to ensure that you have written proof from the debt collector that you payment settles the debt in full and “release[s] you from further obligations.”
If you have questions or concerns about your rights as a consumer, do not wait to discuss your case with a consumer protection attorney in Oak Park. You should contact the Emerson Law Firm today to learn more about our services.
See Related Blog Posts:
Filing for Bankruptcy a Second Time

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