In many cases, if you dispute the debt, the collection agency will just sue you and (assuming the debt is valid) obtain a judgment for the full amount of the debt, plus court costs as well as other fees that might be applicable (eg attorney fees, collection fees, etc.)
If you think the statute of limitations for the debt is about to expire or has expired, be cautious when sending a letter asking the collector to validate the debt. You don't want to inadvertently acknowledge the debt in your communications, which could restart the limitations period.
This can happen in several ways: acknowledging the debt, which revives a dormant claim and resets the entire debt, not just the contested portion; making a partial payment, which can be seen as an acknowledgment of the debt; or entering into a repayment agreement with the creditor after disputing the debt, which also ...
Specifically, the rule states that a debt collector cannot: Make more than seven calls within a seven-day period to a consumer regarding a specific debt. Call a consumer within seven days after having a telephone conversation about that debt.
One of the most rigorous rules in their favor is the 7-in-7 rule. This rule states that a creditor must not contact the person who owes them money more than seven times within a 7-day period. Also, they must not contact the individual within seven days after engaging in a phone conversation about a particular debt.
If you are struggling with debt and debt collectors, Farmer & Morris Law, PLLC can help. As soon as you use the 11-word phrase “please cease and desist all calls and contact with me immediately” to stop the harassment, call us for a free consultation about what you can do to resolve your debt problems for good.
If you attempt to contact creditors and dispute the debt, your actions could cause the clock to restart, thus allowing creditors more time to take legal action against you.
Most consumer debts will “expire” after three to six years, meaning a creditor or debt collector can no longer sue you for them. You're still responsible for paying old debts, but waiting until the statute of limitations runs out might help you avoid future legal issues.
Most states or jurisdictions have statutes of limitations between three and six years for debts, but some may be longer. This may also vary depending, for instance, on the: Type of debt. State where you live.
Cease Collection Efforts: If the creditor cannot validate the debt, they must cease all collection efforts until proper validation is provided. Dismissal of Lawsuits: If the creditor has filed a lawsuit against the debtor, failure to validate the debt can result in the dismissal of the case.
Typically, debt collectors will only pursue legal action when the amount owed is in excess of $5,000, but they can sue for less. “If they do sue, you need to show up at court,” says Lewis-Parks.
Normally, a creditor reports the first delinquency date of a charged-off account. This date should remain unchanged, regardless of how many times the debt gets sold. The only circumstance that a date would change is if you got the account current and then stopped paying on it, thereby creating a new delinquency date.
It is usually worth the effort to dispute the debt. At the very least, it will buy you some time. Best case scenario: you find out you do not owe the debt at all!
Debt collectors are not permitted to try to publicly shame you into paying money that you may or may not owe. In fact, they're not even allowed to contact you by postcard. They cannot publish the names of people who owe money. They can't even discuss the matter with anyone other than you, your spouse, or your attorney.
I am writing in regards to the above-referenced debt to inform you that I am disputing this debt. Please verify the debt as required by the Fair Debt Collection Practices Act. I am disputing this debt because I do not owe it. Because I am disputing this debt, you should not report it to the credit reporting agencies.
Can you dispute a debt if it was sold to a collection agency? Your rights are the same as if you were dealing with the original creditor. If you do not believe you should pay the debt, for example, if a debt is stature barred or prescribed, then you can dispute the debt.
For instance, if you've managed to achieve a commendable score of 700, brace yourself. The introduction of just one debt collection entry can plummet your score by over 100 points. Conversely, for those with already lower scores, the drop might be less pronounced but still significant.
Restarting the Statute of Limitations After Expiration
According to California Code of Civil Procedure 360, the only way to revive an expired statute of limitations is by written promise signed by the debtor. Making a voluntary payment on an expired debt isn't enough to bring the obligation back to life.
Once you notify the debt collector in writing that you dispute the debt, as long as it is within 30 days of receiving a validation notice, the debt collector must stop trying to collect the debt until they've provided you with verification in response to your dispute.
Disputing a charge on your credit does not directly impact your credit score. However, if your credit report changes due to the dispute, your score may change accordingly. For example, resolving an inaccurate credit utilization error might increase your score.
You're not obligated to pay, though, and in most cases, time-barred debts no longer appear on your credit report, as credit reporting agencies generally drop unpaid debts after seven years from the date of the original delinquency.