Collection Agencies Target Old Credit Card Debt Personal Finance AARP Eve
Collection Agencies Target Old Credit Card Debt - Personal Finance - AARP Eve...
– Receive access to exclusive information, benefits and discounts.
You should always pay your debts, right? But in the case of a , doing the right thing ethically can cause problems legally. That's because every state has statutes of limitations on debt, typically from 3 to 10 years. These statutes limit how long a can sue to reclaim the money. Collectors can buy "out of statute" debts for pennies on the dollar from credit card issuers, cellphone firms, and other companies, so anything they squeeze out of a borrower is almost pure profit. And they often won't tell you you're not legally obligated to pay. In many states, making a small payment on an old debt will restart the statute of limitations and allow a creditor to sue. That can lead to and wage garnishment. In a new twist, collection agencies partner with banks to offer credit cards to people with . If you snap up the card, you might not realize you're also agreeing to pay the old debt, which has been added to the card's balance. In 2010 Monterey County Bank paid a $3 million settlement without admitting or denying wrongdoing after the FDIC accused it of helping a debt collector revive expired debts with deceptive card offers. Also of interest: With the economy improving and looking for fresh starts, these collection efforts are on the rise. But don't take the bait: Tell the collection agency — in writing — to stop contacting you.
Cancel You are leaving AARP.org and going to the website of our trusted provider. The provider’s terms, conditions and policies apply. Please return to AARP.org to learn more about other benefits. Your email address is now confirmed. You'll start receiving the latest news, benefits, events, and programs related to AARP's mission to empower people to choose how they live as they age. You can also by updating your account at anytime. You will be asked to register or log in. Cancel Offer Details Disclosures
Dusting Off Old Debt
Federal state laws limit collectors in chasing you over ancient debt
Dear Liz: A just called about a I failed to pay — more than 20 years ago! The agency is offering a repayment plan. Should I take it?More on Debt Collection
– Receive access to exclusive information, benefits and discounts.
You should always pay your debts, right? But in the case of a , doing the right thing ethically can cause problems legally. That's because every state has statutes of limitations on debt, typically from 3 to 10 years. These statutes limit how long a can sue to reclaim the money. Collectors can buy "out of statute" debts for pennies on the dollar from credit card issuers, cellphone firms, and other companies, so anything they squeeze out of a borrower is almost pure profit. And they often won't tell you you're not legally obligated to pay. In many states, making a small payment on an old debt will restart the statute of limitations and allow a creditor to sue. That can lead to and wage garnishment. In a new twist, collection agencies partner with banks to offer credit cards to people with . If you snap up the card, you might not realize you're also agreeing to pay the old debt, which has been added to the card's balance. In 2010 Monterey County Bank paid a $3 million settlement without admitting or denying wrongdoing after the FDIC accused it of helping a debt collector revive expired debts with deceptive card offers. Also of interest: With the economy improving and looking for fresh starts, these collection efforts are on the rise. But don't take the bait: Tell the collection agency — in writing — to stop contacting you.
Cancel You are leaving AARP.org and going to the website of our trusted provider. The provider’s terms, conditions and policies apply. Please return to AARP.org to learn more about other benefits. Your email address is now confirmed. You'll start receiving the latest news, benefits, events, and programs related to AARP's mission to empower people to choose how they live as they age. You can also by updating your account at anytime. You will be asked to register or log in. Cancel Offer Details Disclosures