When you default on a debt, your creditor has some options. They can try to get you to pay, they can sell the debt to a variety firm, or they can just write it off. Of course, they also have the selection of suing you for the defaulted estimate plus further fees. But, how long can they, or the variety department who collects on your debt, go after you for the money?
Collection agencies like new debt. If they can get debt that was defaulted on within the last 180 days, they will have a very high probability of contacting you for payment. When they buy the debt, they get the most new phone numbers, address, your social security number, and any other facts the lender feels is important. They may even get original signatures or paperwork showing that you agreed to the terms of service and are legally liable for the debt.
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When the assembler gets a hold of your file, they start pursuing it immediately. You will get letters, phone calls, and a nagging suspicion that every time your phone rings, it will be person wanting the contents of your wallet. The fresher the debt, the harder they work, because they know where to find you.
After a period of time, generally 9 months to a year, the debt starts to be come known as 'stale'. This debt is much harder to accumulate on. person who has defaulted on a loan or credit card probably has defaulted on others, and may have faced eviction or has moved to try to find work. Their phone numbers probably don't work, the address is invalid, and the debt assembler has to work harder to find them (see Cc2: How Debt Collectors Find You). This debt, when purchased, has a much lower return than does fresh debt. Because of that, it is substantially less costly than fresh debt for a variety department to buy.
Older still is out-of-statute debt. From a legal standpoint, each state has rules about how long a person can be sued by a variety department to try to accumulate debt. When the debt passes a safe bet estimate of months or years after the preliminary default, the assembler can no longer sue you for it. That is why they often sue in the few months before debt goes out-of-statute. Once the suit is filed, it won't matter how long you wait. There is no time limit after filing. Before filing, however, they have limited time.
Out-of-statute debt is very hard to accumulate on. However, since it is so cheap, it takes very few collected dollars for a variety department to make a profit. They may, depending on your preliminary contract, also be able to try to accumulate on interest at the default rate. So it takes very few payments to make these folks feel wealthy. Since the time period varies for this debt, you should be familiar with your state's laws concerning collections. Texas is among the most convenient to the debtor at 2 years, and Ohio is one of the strictest at 15 years.
The bottom line, however, is that there is no time limit for them to try to collect. There is a time limit for suing you, but they can call you forever.
One final note about this subject: If you riposte to a variety department by production a cost or by writing a letter, the clock starts ticking again for out-of-statute collections. At that point, they can sue you again, as long as the original time period for out-of-statute has not elapsed. And if you want the calls to stop, you need to learn your rights under the Fair Debt Collections Practices Act (Fdcpa).
How Long Can a Debt collector Come After You?
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