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Debt collection and statute of limitations for debts

Mon Mar 20, 2006 11:03PM | By Tony

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Q: My wife and I have a few accounts that we continue to get collections notices on. We live in California. Because of medical issues, we ran into severe financial woes years ago and had some store credit cards unpaid. Some of these are 8 years old and were reported on our credit report back then. After many years, we were able to start building our credit up again. Now, other collectors have the same bills and are again, threatening to start putting these on the reports again. With this going on, we will never clean our credit report.
Three questions:
1: If the old accounts have passed the SOL, can they be sold to other collections people and the time start new? Can we be taken to court now when the original stores did not?
2: Can our credit report be messed up again for these debts?
3: What is the SOL for collections on credit and store cards? I have been on Social Security Disability now for years and am permanently so I can not pay these. However, we will never be able to purchase a place if these "old" bills continue to re-service through new collections agencies. Any help would be appreciated. We have looked into debt consolidation but can't afford it. Plus, we have already gone through the years of having bad credit reports because of these cards, we do not feel we should be penalized again.

A: The statute of limitations for debts on credit card debt in California is 4 years. It includes department store cards as well. The time doesn't start anew no matter how many debt collection agencies buy SOL-expired debt. The creditors can take you to court but they can't achieve anything if statute of limitations has expired - see debt collection time limits. So, to put it mildly, tell debt collectors to stop calling and read Fair Debt Collection Practices Act.
Your credit report may still show few unpaid debt accounts because generally, bad credit time limit for this type of unpaid debt is 7 years. Your credit report may also show some charge offs. The credit rating and score shouldn't be bad since you have established new credit history and essentially overlapped bad credit with good.
Don't go into debt consolidation. According to what you stated, you don't need to. You don't have any debt that should be consolidated. Your old bills should not resurface but it may happen. You should keep an eye on your credit report with free annual credit report provision which you are probably aware of and doing already. You should check your credit report and, if it has any bad credit records, charge offs, etc., initiate credit report dispute. Do it nice and explain the situation, tell them that you have tried to pay in good faith, but couldn't due to the medical issues. Ask the credit reporting agencies to remove those records. See this dispute letter as an example. The person did acknowledge the debt and provided reasonable explanation, and it worked.