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Question
Today my husband received a letter in the mail from llc. they were offering a 80 % discount on paying a 8-10 year charge off, that he can't even remember if it was paid off or not ? what is this ? should he pay this or would statue of limitations move into this ?
I cannot answer what this might be because I have no details. However, I can tell you that if the age of the obligation is as old as you indicate, then you are correct in that the statute of limitations would PROBABLY cover any potential obligation that might exist and that you are not likely to be bound to make any payments at this late date.
You did not indicate what state this was for and there are some types of contracts in some states that can be valid for 10 or even 12 years, and if as the result of a bond or judgment can even be 20 years! I suggest that you check the state in which the debt was supposedly incurred for more details.
It is worth noting that the limitations apply to private debts, since there is no Statute of Limitations on Government Fines, Taxes, Student Loans, and Child Support. Generally, unsecured debt would have expired by now but again, you need to check the state for more details.
Debt collection companies often “buy” debt from others at a fraction of the value. Anything that they collect over and above what they paid is profit, hence the great deal that they are trying to offer you.
I do have one more piece of advice – do NOT acknowledge the existence of the debt in any way because as a debt collector, they report to the credit bureaus and as I noted above this can reset the clock.
I would respond with a warning to the company that they are in breach of the Fair Debt Collection Practices Act (FDCPA) and if they report ANY of this activity on your husband’s credit report they will also be in breach of the Fair Credit Reporting Act (FCRA). Violation of each of the acts carries substantial fines and that you will seek action against them if they contact either of you again and if they report this on any of the credit bureaus. I would also warn them that if they re-sell this debt to another collector that they will again be in violation of the Act and you will seek action against them.
If you make a single payment, you have reset the clock on the debt and the statute of limitations starts all over again. Even making a promise to pay will restart the clock. So be VEY careful in how you communicate with them.
Best of luck,
Michael
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Answers by Expert:
Michael Fay
Expertise
My focus and specialty is in credit, so that the risk of the debt itself is minimized. This means understanding it, predicting it, and helping to correct it. Having worked in contracts & credit, I have also worked with all of the related documents such as Guarantees (personal and corporate), and Security Agreements (aka UCC’s or “liens” – but I caution you in using those interchangeably).
Experience
I have a broad background with more than 15 years in the credit industry. Ten years with Dun and Bradstreet, first as a field reporter creating reports, then in customer service, finally I served as the credit manager designing risk models for many national and international customers through D&B’s Outsourcing function. Five years with another publicly traded firm where I created the credit department and then served as credit manager for North America. At both companies we used both business and consumer data.
You probably know that both business and personal credit have scores; what you might not know is how many different types of scores there are. I am familiar with and have used many different scores in each. Also be aware that each credit type (business & personal) is unique with different processes and different time frames.
I have served on the board of directors for companies in many states and still serve in some capacity in a few. I contribute to credit publications and work with the non-profit arm of the SBA called SCORE.
Organizations
ACA International * NACM * Credit Risk Managers * SCORE (SBA)- Counselors to America’s Small Business * Payment Card Industry Network * PaymentSource.com * D&B Alumni * Psi Chi, National Honor Society for Psychologists
Education/Credentials
BIS in Business and Psychology, University of Minnesota * MBA is still in progress (on-line)
Awards and Honors
State of Colorado - State finals in Accounting and Advanced Accounting. * D&B Leadership Winner (3 times) * D&B Leadership Finalist (3 times) *
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