Collecting legacy debts – even debt you may not be legally responsible for – is becoming a highly profitable venture. Companies purchase these “junk debts” for pennies on the dollar and then go after the people they think are most likely to pony up. A phone call can turn into badgering, harassment, threats to sue, and other inappropriate and sometimes illegal actions. If you find yourself talking to a collector about a debt that’s “come back to life”, here’s how to make sure your rights aren’t violated.
Do not acknowledge the debt. If you’re not sure whether you owe the debt, don’t say anything that could indicate that the debt is yours, and do NOT agree to make any kind of payment. Doing this can give the company the legal right to collect.
Don’t fall for any traps.
- illegally “re-aging” debts (reporting the old debt to the credit bureaus as if it’s new)
- promising to wipe off a red check mark on a credit report
- bait-and-switch credit card offers (they tack on the balance of the zombie debt)
Get it in writing. Ask for proof that you owe the debt, like the credit card agreement you originally signed, along with an account history. If they don’t have that proof then they don’t have the right to take action against you. Keep repeating: “I want to see evidence of this debt in writing. I do not acknowledge this debt.”
Check the statute of limitations to make sure you’re not responsible for the debt anymore. The statute of limitations essentially defines how much time you can go without paying a debt before a collector’s right to collect through the court system expires. Every state in the US has different rules and exceptions regarding when the time period officially begins, how long it lasts, and what can “revive” the statutory period, so you really do need to check the laws or consult an attorney in your own state.
Write a letter explaining that you are not responsible for the debt, you do NOT acknowledge it, and you demand they stop harassing you or you will take legal action. If you’ve done your homework and you know that you are not responsible for the debt (such as if your statute of limitations expired and you don’t meet the criteria in your state for extending it, or you declared bankruptcy), send them a letter through certified mail and get a return receipt.
Watch your credit report carefully. Collectors might try to report the debt or taint your credit history. As mentioned earlier, collectors could post an old debt as if it’s new, or lie about the date of delinquency (in an attempt to start a new statutory period). Dispute any questionable entries with the credit bureau and the agency.