Question on ANCIENT bill
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Question on ANCIENT bill
| Thu, 04-27-2006 - 12:01pm |
I had paid off everything on my credit report - to the tune of about $6,000 or so.
| Thu, 04-27-2006 - 12:01pm |
I had paid off everything on my credit report - to the tune of about $6,000 or so.
The account is 12 years old and can no longer be reported on your credit report. Old, inactive accounts will "fall off" your credit report after 7 years from the date of last activity.
I wouldn't consider paying this particular bill. The statute of limitations -- the amount of time a creditor can sue over an old debt -- has probably expired (be sure to look up your state's SOL, which information easily available online). If you have moved to another state since you incurred the debt then be sure to also check your current state's SOL. Generally speaking the SOL averages 4 years (give or take a year), which means once the debt is more than roughly four years old your creditor can not sue you to pay. This debt is way outside the statute of limitations. Again, be sure to double check your state's provisions.
So my opinion is you should not be in any burning hurry to get this old debt paid off. The creditor can not report you (and do not acknowledge the debt in any phone call or in writing to ensure your rights are protected) to the credit bureaus. The creditor lost the right to sue you around 8 years ago. Don't sweat it. Focus on the debts you have prioritized. This Kay's Jewelers closed account can't really hurt you.
Just out of curiority have you double checked that the "bill" for the Kay's account was sent by Kay's or a collection agency? I ask because after 12 years it is unlikely Kay's has carried this very old account on their books. Typically these accounts are closed by the merchant after the merchant makes 2-3 attempts to collect from you and after no payments the merchant charges off the account (and by now the charged off account will not appear on your credit history). Charging off an unpaid account legally clears the debt from the merchant's books. So, once they charge off your account their books are cleared of you and the account is sold to a collection agency for pennies on the dollar. When you stop hearing from the merchant next comes along the collection agency. The collection agency will try to get you to pay the full amount plus interest plus anything else they can guilt you into paying. But in your case nothing has happened. The account was closed and for 12 long years it silently faded into the past. I bet Kay's charged off the closed account and sold you off to collections, then once the statute of limitations passed (as I wrote it's in the neighborhood of 4 years plus-or-minus) everyone gave up trying to collect because you can not be sued.
You also need to be aware there is a nasty bit of collection con artists snapping up accounts you can not legally be required to pay off. There is an article exposing this scam. It's called "ZOMBIE DEBT COLLECTORS DIG UP YOUR OLD MISTAKES" written by Liz Pulliam Weston. Here is the link: http://moneycentral.msn.com/content/Savinganddebt/Managedebt/P74812.asp Read this article. You may then think twice about paying a bill that is in violation of the law.
Of course after you get informed of your rights and still feel compelled to pay a debt that you are illegally being conned into paying, that's your choice. But I certainly would not pay a legally non-existent debt before your current $10,000 in credit card and student loan debts. Frankly I would just ignore the whole matter since you are pretty much insulated from all liability.
Hope this helps.
Carolyn
Thank-you for your prompt reply :)
Sheri Ann
This may be helpful:
http://www.bcsalliance.com/y_debt_sol.html
They can still sue you even if the SOL is up, but I doubt they would bother doing so because it is so old.
Heather
You do not have to pay this debt. Under NO CIRCUMSTANCES acknowledge the debt to anyone on the phone, in person or in writing. Collection agencies, especially zombie debt collectors, love to blind side you with threatening phone calls and ugly demands. Never acknowledge this debt. If you say anything to "own" the debt, you have just made the debt "current". Collection agencies know how to play the game and if you do not know the law or your rights, you can accidently make a very expensive error. If you get a phone call from out of the blue I would hang up without saying a word, or say "this is not my debt" and hang up. Be secure in the knowledge you can not be sued to pay. Legally you are no longer responsible. Those are the facts and never let any con artist zombie debt collector tell you anything different!
Here is a link for looking up the statute of limitations: http://www.ihatedebt.com/StatuteofLimitations.html
As you can see, no matter where you live this debt is now dead and gone.
Since you can not be sued for the debt, I would ignore any efforts to collect. What is happening is illegal and if you "make nice" you are going to pay money you legally no longer owe. Believe it -- you are in a position of strength and I would never let anyone con me into paying a debt that can no longer be collected.
To answer your question: paying a collection agency does not pay Kay's. Kay's got money years ago from the collection agency when they sold off your account. Any money you pay would go straight into the collection agency's pocket. And if you did pay a collection agency, who probably paid 6 or 8 cents on the dollar for your account, I sure as heck would NOT pay them the full amount. I would negotiate down to a rock-bottom-of-the-barrel dollar amount because they only paid a few dollars for your debt. But effective 6 years ago you owe zero dollars. Zero, zip, zilch, nada.
Congratulations. Here you thought you had another debt to add to your list and the truth of the matter is you owe zero.
Carolyn
The statute of limitations relates to a creditor's right to sue to collect money. If sued for a bill that was past the statute of limitations I would go to court and have the case dismissed by telling the judge, and providing evidence, that the statute of limitations had expired. But the chance of this happening is nil.
True, anyone can sue you for any reason, but it is highly doubtful a creditor would attempt litigation on a debt that can not be legally collected. There is no basis for suit. I am sure the judge would have a field day dressing down the collection agency.
The SOL is there to protect debtors from creditors. The website you posted says, "The purpose of these statutes of limitation is to bring some measure of fairness to the debtor so that he / she (1) will not have to worry about being sued for the rest of their lives; and (2) so that the debtor can properly defend himself with fresh evidence and witnesses, if any."
The OP needs to be on her toes, however, to avoid trickery. If a creditor can talk us into making a payment they can and most likely will immediately sue. Agreeing to make a payment means we have acknowledged the debt and that's the entire reason a zombie debt collector would call and/or write. Once they tricked you into the response they want, they will then sue.
Nevertheless, she is in a position of strength. Once the zombie debt collector is aware they have an informed debtor they drop her like a hot potate and move on to the other hundreds and thousands of zombie debts on the list. They will not waste time on her and certainly not file suit.
Carolyn
Carolyn, Thank-you so much for this invaluable info!
Sheri Ann
Sheri Ann