Consumers are often confused about their debt collection liabilities with regard to time barred debts. While it is a definite fact that you are liable for all your debts, you might be able to get away with certain debts which have been time barred.  Depending on your state after a debt has passed a certain amount of time it is declared as uncollectible in accordance with the Statute of Limitations and collection agencies cannot pursue the collection of those debts.

What Are Time Barred Debts?

In simple terms a time barred debt is a debt which if from so far back that the creditor or debt collector cannot sue you in respect to that debt. Depending upon the state you are in and in accordance with the statute of limitation, there is a certain period after which debt collectors may no longer file charges against you.  It is best to check the period after which a debt is considered time barred. Information regarding the same can be obtained from the Attorney General’s office (1).

Debt Collection On Time Barred Debts

The Federal Debt Collection Practices Act (FDCPA) does not place any restriction on the collection of a statute of limitations debt by a debt collector. However the one restriction in place with regard to statue of limitations on debts is that debt collectors cannot sue or threaten a client in regard time barred debts. In the event that you have been sued by a debt collector for a debt with a statute of limitations, the law suit can be annulled by informing the judge that the debt has reached the status of being time barred.

Time Barred Debts and Your Credit Report

There has been a lot of speculation with regard to whether or not a statute of limitation debt can appear on your credit report. It must be kept in mind that irrespective of whether or not the debt is time barred, it can appear on your credit report depending on the period of delinquency. Once a debt is more than seven years old it usually falls off your credit report. Debt collectors cannot collect on debt that has been discharged in bankruptcy, irrespective of when the debt was incurred.

Efforts To Collect On Time Barred Debts In The Future

It may be in your best interest to get a written confirmation from your creditor stating that you have been released from your debt obligation. In relation to this written confirmation it may be advisable to consult an attorney in regard to the validity of the document. Once you have received this document debt collectors can no longer pursue you with regard statute of limitation debts. If a debt collector is pursuing you in regard to a time barred debt, you have the right to sue the debt collector. In the event that your law suit is successful you will be entitled to claim not only damages but also a sum of $1,000 and all your attorney fees and court charges.

Hence these are the basic rules governing time bared debts. It is very essential for consumers to completely understand their situation and obligations with regard to time barred debts before seeking any form of action or pursuing any law suit.

References:

1. Home Page – National Association of Attorneys General
2. What are time barred debts? – BCS Alliance
3. Time Barred Debts – Federal Trade Commission