When collectors come after debt you didn't know you had

[ursi]

After Kim Mullen filed for bankruptcy in 1993, she cut up all her credit cards in her lawyer's office. Since then, the Levittown resident has managed to obtain a good credit rating.

But in December, a debt collector contacted her, saying she had an unpaid card balance of $5,655 from 1992. With interest, the letter claimed, the debt had grown to $19,400.

As old debt seems to rise from the dead, it's taken on a name -- "zombie debt." And in recent years, more and more such debt is coming back to haunt consumers, according to their advocates and lawyers who specialize in debt.

Mullen, 46, says she doesn't remember the debt and has challenged it. Others who have received such notices say the purported old debts are a result of identity theft.


more...

http://www.newsday.com/news/columnists/ny-bzdaltcov0210,0,78321.column?page=1

[Bobbieo]

1. This is scary!!! Could happen to anyone who ever had a credit card!

[Cooley Hurd]

2. Such debt collection is illegal (meaning you have no obligation to pay them)

...however, they harass you because they bought the debt from your old debtor. Blow them off, or threaten them with harassment, they'll disappear.:thumbsup:

[ursi]

3. but be sure to try and get it off your credit rating!

[Cooley Hurd]

4. I'm not quite sure of the time length, but debts cannot be collected after...

...a certain time (nor can it be listed on your credit report). It might be anything from 7 to 10 years.

[deminatl]

5. i am pretty sure its 7 years

after that it is off your credit report.
These bottom feeders buy debt for the original lender for fractions of cents on the dollar

[happyslug]

9. Varies from state to state, but most follow the UCC and its four years statute of Limitation

Under a four year statute of limitation any lawsuit regarding a debt must be filed within four years of the last time the card was used, OR you made a payment on the Debt. If it has been more than four years since you made any payments, it is time barred under any four year statute of limitations.

First exception: If you were stupid and made PAYMENTS on the debt that was time barred, the courts can rule that you made a new contract and the statute of limitation no longer apply (i.e. NEVER pay on a debt that may be time barred, no matter what the other side says, seek legal advice before you do it).

Second Exception: if the Statute of limitation is greater than four years. In my home state of Pennsylvania the Statute of Limitations is four years with exceptions. One of the exceptions if the contract was made "under seal". Then the statute of limitation is 21 years (But such contracts can NOT be for goods, just money).

[notadmblnd]

6. often times, it is the debt of the credit card you filed in your bankruptcy

if it was discharged as part of your bankruptcy, ignore the notice.

[Snarkoleptic]

7. I worked for a finance company many years ago.

Here are some other fast facts-
*Generally, a debt cannot be legally collected if the borrower last paid over 7-years ago.
(if they get you to pay them a penny, they have another 7-years to harass you)
*Collection agencies will buy bad debt for pennies-on-the-dollar and try to make a buck on it.
*It's illegal for a creditor to attempt to collect any debt that was discharged in a bankruptcy.
*A collector may NOT contact a debtor before 8 a.m. or after 9 p.m.;at inconvenient or unreasonable places;at a place of employment if it is known the employer prohibits such contact;if an attorney is known to represent the debtor, the attorney should be contacted instead.
*You may stop a collector from contacting you by writing a letter to the collection agency telling them to cease all communications with you and that you will deal with the creditor directly. The letter should be sent by certified mail with a return receipt requested. Remember to keep a copy of the letter.

[Riley133]

8. Except for Ohio - link for state by state statute of limitations

Here is a table of the statue of limitations. Open accounts for Ohio have no statute of limitations. Even if something rolls off your credit rating (finally), it could be bought and come back to haunt you again.

http://www.budhibbs.com/statute_of_limitations.htm