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Bach Is Your Financial Future.
555 Skokie Blvd Suite 250, Northbrook, IL 60062
PO Box 1285, Northbrook, IL 60062
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Many people experiencing financial hardship have trouble seeing a light at the end of the tunnel. Is it possible to simply wait it out? Will agencies and creditors eventually stop making debt collection calls?
To help you understand this situation, our team at Bach Law Offices, Inc. has compiled the following FAQs about time-barred debt. If you still have questions or need professional, personalized recommendations, please do not hesitate to get in touch with our team.
Also called zombie debt, time-barred debt is debt that is older than the statute of limitations. The time period typically begins once you miss a payment. Collection agencies cannot sue you for time-barred debt. If the debt you owe is time-barred, you are generally safe from wage garnishment, bank levies, and other actions a collector could use after obtaining a judgment against you.
The length of time a creditor or agency can sue you for debt depends on the statute of limitations in your state as well as the type of debt.
Generally, a collector has 10 years to sue you for debt based on written contracts and 5 years for debt based on unwritten contracts. Credit card debt, for example, is generally based on an unwritten contract, so creditors would only have 5 years to file a lawsuit.
Yes. While they cannot take you to court, debt collectors can still contact you to try and collect what you owe.
A collector might not tell you if a debt is time-barred. You can ask, and they may or may not answer—but if they do answer, they are legally obligated to tell the truth. You can also ask them for the date of your last payment, which allows you to calculate whether the debt is time-barred.
Within 30 days of receiving written notice of the debt, send the collector a letter that says you are disputing the debt and requesting verification. Debt collectors are legally required to stop all collection attempts until they verify your debt. Be sure to keep all records of correspondence.
Sometimes, debt collectors will attempt to collect a debt from individuals who never owed it in the first place. This is why it is critical to request verification of the debt.
Your credit may suffer, and debt collectors can continue to contact you. You can, however, demand that they stop their collection attempts. Normally, this type of demand would trigger a lawsuit, but that legal recourse is not available for a debt collector pursuing a time-barred debt.
If your debt is time-barred, do not make a partial payment. Making a partial payment on a time-barred debt could revive the debt (i.e. reset the clock). The debt collector could then sue you for the remainder of what you owe.
Some creditors or agencies may accept a settlement (i.e. an amount that is less than what you officially owe, while forgiving the rest). If you negotiate a settlement, be sure to get this agreement in writing. Otherwise, they could take you to court by arguing that you made a partial payment.
The worst thing you can do in this situation is nothing. Be sure to respond to all notices and attend the trial. Together, you and your attorney can prove to the judge that your debt is time-barred, and the lawsuit should be dismissed.
If you don’t respond to the lawsuit, the judge may automatically issue a judgment against you, allowing the debt collector to garnish your wages or levy your bank account.
Bring Your Questions & Concerns to Our Team
At Bach Law Offices, Inc., we understand how stressful it can be to hear from a debt collector for a payment you missed years ago, or for a debt you never even owed in the first place. We are fully prepared to help you navigate this situation, and we will not hesitate to advocate for your rights in court if that is what must be done.