Stressed Woman With Debt Paperwork Cardoza Law CorporationIt is illegal for a debt buyer to try to get you to pay on a debt that is past the statute of limitations for collection. That’s an important protection—but what does it actually mean? If you don’t understand the law, you can’t be on the lookout for debt collectors who are breaking it. And these collectors have plenty of tricks up their sleeves to squeeze every possible penny out of you.

What Is Old Debt?

The first thing to understand is that a debt can’t be owed forever. In California, in fact, the statute of limitations on most debt is four years. That means that a creditor or debt collector cannot attempt to collect on an account that was last active four or more years ago. In most cases, the clock starts with the last payment made on the account.

Who Is Collecting on My Debt?

It is also important to be aware of who may be contacting you about a debt. Once the original creditor—whether it is a credit card issuer, hospital or doctor’s office, or utility company—has given up trying to collect past-due payments from you, they will then sell the debt for pennies on the dollar to debt buyers. The creditor now has at least a portion of their money back, but the debt buyer is at a loss unless they can collect more from you than they paid for it. Debt collection is an $11 billion industry in the United States because these debt collectors are often successful at getting you to pay.

Tricks of the Debt Collection Trade

Many of the tricks debt collectors use are illegal. Under the Fair Debt Collection Practices Act, debt collectors are not allowed to threaten or harass consumers, but they often do. On top of that, they are frequently attempting to collect on debt that is past the statute of limitations. Even worse, some debt collection companies are now tricking consumers into what is known as “re-aging” old debt. Since the statute of limitations restarts every time a payment is made, all the collector has to do is get the consumer to make a payment—no matter how small—and they can then sue the consumer for the entire amount of the debt. Companies have been doing this by sending pre-approved credit cards to debtors, promising them a fresh start if they start paying on the debt. They may also force a small wage garnishment through a lawsuit. In a recent case in Oklahoma, a 19-cent garnishment was enough to re-age a $14,000 credit card debt. Once that clock is reset, the collector has four more years to try to collect the debt. These tactics are not only slimy—they are illegal.

Has Your Credit Been Hurt By Debt Collection Tricks?

If your credit has been damaged by debt collectors you need to speak with an experienced debt collection protection attorney as soon as possible. Contact me online today and let's take the needed steps to help get your credit back on track.


Michael F. Cardoza, Esq.
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U.S. Marine & Consumer Financial Protection Attorney helping victims of ID theft and Credit Reporting errors.
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