Key Takeaways on Debt Collection and Statute of Limitations

Debt collection can be a stressful and confusing process for many Americans, especially when it comes to old debts that may have passed the statute of limitations. The statute of limitations on debt varies by state and type of debt, ranging from three to 20 years. After the statute of limitations has expired, debt collectors can no longer sue you in court for repayment, but they may still try to collect on old debts.

It’s important to know your rights when dealing with debt collectors, as they may engage in shady behavior. Never give personal information or pay over the phone if a debt collector contacts you. Instead, ask for the debt collection notice they are required to provide within a 5-day period.

If you are being pursued by a debt collector after the statute of limitations has expired, you may need to appear in court to prove that the debt is too old to collect. It’s crucial not to make any payments or enter into a payment agreement, as doing so could reset the statute of limitations on your debt.

Ultimately, it’s up to you to decide whether to pay off old debts after the statute of limitations has expired. Some experts suggest devising a repayment plan, while others advise against paying debts that are legally unenforceable. Seeking help from a nonprofit credit counseling agency or a financial advisor can help you navigate the debt collection process and make informed decisions about your financial future.