What Are My Options For Dealing With An Old Debt?
As collection agencies get bolder and more companies sell them debts that they have been unable to collect, more and more people are finding notifications that they owe old debts in their mailbox or on their answering machines. Although the statute of limitations on most debts is seven years, most individuals do not know how long ago the debts were incurred or when the last payment on the debt was made. There are several options that can be used for dealing with an old debt and the method chosen will depend on the individual’s specific circumstances.
Ask For Debt Validation
One of the first things that you should do when informed of an old debt is ask the collection agency that sent the notification to validate that the debt is yours and is a valid charge. There are a number of unscrupulous collection agencies out there that sent notifications for fraudulent or legally uncollectible debts in the hopes that the person will panic and pay the debt without asking too many questions. If the collection agency is unable to validate the debt, then notice should be given to them in writing that they need to stop contacting you about the matter and if they contact you about the debt after receiving this written notice, they can be reported to the Federal Trade Commission (FTC).
Debt Settlement
In many cases, if the debt is more than a year old, the collection agency will be willing to settle the account for a percentage of the total so that they are paid something instead of wasting time and energy for no payment at all. If you choose to settle the debt, make sure that you have the terms of the settlement in writing from the collection agency and that you check your credit report after the payment has been made to make sure the collection agency has reported the account as settled. It is also a good idea to keep a copy of the check or money order used to pay the settlement amount just in case you need it as proof of payment down the road.
Legal Representation
If the debt is not valid or the collection agency is harassing you, you may want to consider hiring a lawyer for legal representation. Once you have notified the collection agency in writing that you are being represented by a lawyer and all further communications should be directed to them, the collection agency is no longer allowed to contact you directly. If the debt is not valid, then the collection agency will generally not risk fighting with a lawyer in court on a case that they are going to lose.
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