The answer is yes: the debt collector is allowed to try to collect the debt. However, you as the consumer need not pay it.

To understand why debt collectors would try to collect very old debt, you need to understand a few things about the debt collection industry. The number of debt collectors has skyrocketed in recent years, meaning that debt collectors are competing vigorously for any debt portfolios that need to be collected. As a result, many banks, mortgage companies, auto lenders, retailers, credit card companies, etc. now find that there is actually a market among debt collectors for very old debts that have long been written off. Competition is such among debt collectors that they’ll try to collect even on debts more than four years old.

In California, four years is a “magic number”, because it is the statute of limitations for any lawsuit alleging a breach of a written contract. Most consumer debts fall under the four-year statute of limitations, although many also fall under the two-year statute of limitations for breach of an oral contract. The four years would be calculated from when the creditor knew, or should have known, that the agreement had been breached. Certainly, if the creditor charged off the account, this would start the four years running, and it may have been running before then.

So, if you’re debt is clearly more than four years old, don’t pay on it, no matter what the debt collector says or threatens. Fight it. If the harassment is bad enough, hire an attorney to bring an action against the debt collector.

Also, NEVER NEVER NEVER make a payment, even a small one, on an old debt. This has the effect of re-starting the statute of limitations, and it means you will end up paying the entire debt when you didn’t have to before you made the payment. Never let a debt collector trick you into making a payment on a debt which is too old to collect.

I hope this short article is of assistance to you. Thank you for taking the time to read it.
 

Copyright 2007 by Robert F. Brennan of Brennan, Wiener & Associates. For more information, contact www.SoCalDebtCollectionAbuse.com or send an email to info@brennanlaw.com.