Expert: Chris Ebert - 6/11/2009

Question
I had a large credit card balance in 2002, and was out of work for 5 months.  I was unable to pay, and it was charged off.  My last contact with that company was in Jan, 2003.  It was due to fall off my credit report next year. In April of this year the debt was purchased by Zenith Acquisitions.  They are now trying to collect on it.  Do I have to pay them?  What can they do?

Answer
Karen,

If you are in Texas or California, a creditor (now Zenith) has 4 years from the date of last payment to sue you. Since it has been longer than that for your case, they should not sue at this point. If Zenith does sue then you answer the lawsuit stating that they sued beyond the statute of limitations.

The other issue is how long can they report it on the credit report. They can only report for 7 years and 6 months from the date of last payment for the original creditor. Zenith can't violate that.

Other than that they can call you forever to try to get you to pay. When they call, tell them not to call again and follow up with a certified mail cease and desist letter.