Bill Collectors Calling On Old Debt

Know What Not To Say To Collectors

You arrive home from shopping and find a message on your
phone from a bill collector. You know your credit. You
know you always pay on time and are not behind on any credit
card bills or loans. Why then, is there a message from a
debt collection agency on your phone?

Its a ploy by some debt collectors to squeeze out some
money on debts that are years old. You may have had some
trouble sometime in your past and now these collection
agencies are unearthing old debts that are five to 10 years
old.

Handling a bill collector who is trying to collect on old
debt can be tricky. If the debt is older than your state's
statute of limitations, the bill collector has no legal
right to collect. In other words they can not sue you or
threaten to sue you. If however, you handle the call
poorly, that old debt can become new debt.

Bill collectors who threaten to sue or have your wages
garnished on a debt that is not covered by the statutes of
limitation are in violation of the Fair Debt Collection
Practices Act and could be fined $1000 for each threat. If
they are smart they know that and will play on your sense of
moral duty to collect the bill.

So what's the problem? If the collection agency has no
legal right to collect, then it looks like you have the
upper hand. However, in some states, if the collector can
get you to admit the debt is yours or if you pay any amount
of money on the debt, the debt becomes new. Not only does
the statute of limitations start again, but the collection
agency can report the debt to the credit reporting agencies
and suddenly your FICO score takes a dive and you start
receiving letters from your credit cards advising of higher
interest rates and lower lines of credit.

The best way to handle a collection call for an old debt is
to say as little as possible. Don't agree to pay. Don't
acknowledge the debt. If it wasnt for the annoying phone
calls that are going to keep coming, it would be best not to
speak to the collection agency at all.

The time to stop the phone calls is before they begin.
Under the law, a debt collector has to send you written
notice advising who the debt is with and for how much. You
have 30 days to respond. If this is in fact a debt that is
older than the statute of limitations, send a letter
disputing (not mine) the debt. The collection agency cannot
contact you again until they can verify the debt and notify
you. If they can't prove it, you don't owe it.

Another more direct approach is to use your right to send a
cease and desist letter. Make it clear in your letter that
you're aware that the debt is "time-barred," and you can't
be sued for the debt and you don't want to hear from them
again. Make certain that the debt is actually beyond the
statute. The best way to check is with your State Attorney
Generals office or consult with a consumer credit attorney