Monday, June 12, 2006

Challenging an Old Debt

Question: I have a credit card account that has not been paid on in 5 years. They wrote it off on my credit report and a debt collection agency is now trying to collect on it. According to there is a 4 year statue of limitation in California for collecting this. Is this correct?

: The information you received from is essentially correct. The credit card account is based on a written credit agreement and the statute of limitation for breach of a written contract is 4 years. This 4 year period begins to run from the date that you first went into default, but this period can be extend if you make a voluntary payment.

The collection agency may not be knowingly be attempting to collect on an uncollectible debt. You should start by sending the collection agency a stern warning letter disputing the debt and instructing them to stop contacting you. Click here for a sample dispute letter. If the collection continues to harass you about this debt, contact us for further assistance.

About the Author
: Carl H. Starrett II has been a licensed attorney since 1993 and is a member in good standing with the California State Bar and the San Diego County Bar Association. Mr. Starrett practices in the areas of
bankruptcy, business litigation, construction, corporate planning and debt collection.


Melinda said...

Can I ask a question about dealing with collection agencies? I had an incident with one after my credit card company had gone bankrupt, leaving me no way to pay off my balance. I paid the collection agency the amount that we'd agreed on, but a year later, they demanded more money, claiming that we had not agreed on the amount. I had a lawyer write a letter (with documentation of my payment enclosed) on my behalf requesting that they not contact me again. Will this incident affect my credit? Thanks.

Carl Starrett said...

This incident SHOULDN'T impact your credit IF the collection agency is following the law. It is not legal to report a debt during the dispute/validation period. However, this does not necessarily mean that the collection agency wlll comply with the law. I would make sure you get a copy of your credit report in a couple of months to see if it has been reported and then dispute the entries if necessary.

Melinda said...

I see, thanks for answering my question!