Time barred debts are very old debts that have crossed the statute of limitations (SOL) and can no longer be collected. These debts are beyond the boundary at which a creditor or debt collector may attempt to collect or sue to collect from you. The SOL period on debts varies from state to state, from three to ten years. In some states it is longer than ten years.
The Federal Trade Commission (FTC) along with private attorneys enforces fair debt collection guidelines through a federal act – the Fair Debt Collection Practices Act (FDCPA). While legitimate debts may be collected by creditors or debt collectors engaged by creditors, the FDCPA plays the role of ensuring fair debt collection practices by the third party debt collectors attempting to collect debts.
Limitations on how debt collectors can collect all types of debts including time barred debts are imposed by federal law. Under the, a debt collector generally is a person or organization engaged in the business of collecting on debts owed to others. This term also covers attorneys who collect debt for others on a regular basis. The FDCPA restricts debt collectors from engaging in any unfair, abusive, illegal or unethical practices while attempting to collect debts. The FDCPA does not cover original creditors attempting to collect their own debts.
Time barred debts are not mentioned clearly in the FDCPA. Debt collectors may attempt to collect time barred debts but the FDCPA does not state anything clearly about this. The FDCPA comes into picture when debt collectors play foul with you. They may attempt to collect time barred debts but they should not sue or threaten to sue you for the debt. If a debt collector attempts to collect or sues you for a time barred debt, you may get the suit dismissed at a court of law by proving the time barred state of the debt.
A time barred debt can appear on your credit report but again it depends on how long the debt was delinquent. If the debt has been delinquent for more than the SOL time or seven years in most cases, it cannot appear on your credit report. In case of bankruptcies, debt collector may not even try to collect no matter what the time of incurring the debt is.
Although, there are no strict methods that can be applied to protect yourself from getting caught in the web of paying debts already paid, a few tips can be taken to avoid any disturbances.
Some tips that can be followed for future protection:
Ask for a form or a letter from creditor stating your release from any further obligation
Consult an attorney regarding the validity of the letter issued by creditor
Sue a collector if you believe that the collector has violated the law while attempting to collect a debt from you
You may sue a collector for the violation within one year from the date of violation
Your attorney may help you recover damages you suffered and/or court costs and attorney’s fees
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The offers protection from illegal and unethical tactics of the debt collectors. A clear understanding of debt collection laws under the FDCPA will entail you to the power to fight the third party debt collectors.