Don't fall for collector's threats on really old debt

To Her Credit columnist Sally Herigstad
Sally Herigstad is a certified public accountant and the author of "Help! I Can't Pay My Bills: Surviving a Financial Crisis" (St. Martin's Press, 2006). She writes "To Her Credit," a weekly reader Q&A column about issues involving women, credit and debt, for, and also wrote for MSN Money, and, and has guested on Martha Stewart Radio and other programs.

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Question Dear Sally,
Just today a credit card company called my private phone number, which I thought no one had, and said they are attempting to collect a debt of $3,100 from 1999. I told them that was 16 years ago and they need to contact my attorney.

They came back and wanted to settle for $1,000. I asked them to send me a letter with the information, and they said they already sent me a letter. I said I never got a letter so they should resend it, and they replied they only send it once -- sorry. 

Maybe this is a scam, I do not know. Regardless, I do not need a blemish on my credit report. Someone told me that due to the length of time, they cannot report to the credit bureaus under the statute of limitations. Your thoughts? -- Naomi


Dear Naomi,
Someone called you about a supposed debt from 1999? I hope you didn't try to bargain with them, admit to owing any debt or give them any personal information over the phone. It sounds suspicious. If you search for the phone number on the Internet, I'll bet you may find other people have reported harassing phone calls from them as well.

I can think of three possibilities for this mysterious "debt":

  • It's a real debt, but it's way past the statute of limitations.
  • It's a total scam. Somebody got your number and hoped to pocket $1,000 from one phone call to you.
  • It's somewhere between the two -- you owed money long ago, but since then this debt has been bounced around from one collection agency to another until this agency bought it for pennies on the dollar. In any case, it's still way past the statute of limitations.

The first thing I usually tell people to do with a mystery debt is to ask the collector to validate the debt. There isn't much point in this case, however, as long as they are claiming the debt is 16 years old. They couldn't successfully collect on it even if they could validate, which I seriously doubt they can. It's a hopeless case from their point of view, and all they need is to know that you are too savvy to fall for it.

There's no need to mention an attorney at this point. You're not naive enough to send them money, let alone give them your bank account numbers. They'll almost surely move on to an easier target.

Don't worry about your credit report for a debt this old. After the original delinquency date on the account, it only takes seven years (five years for New York state residents) for a debt to drop off your report.

It's important to understand that the statute of limitations and the length of time something stays on your credit report are two different things. The statute of limitations is the number of years before a debt is collectible in court and is based on state law. The time period is generally between three and six years. A 16-year-old credit card debt is far too old for collectors to successfully sue you for payment.

That doesn't mean collectors don't try to collect old debts. If the collector does validate this debt and tries to take you to court, don't ignore it. You still have to show up and prove that the debt is past the statute of limitations, or you can lose the case.

Next time someone calls you about somethings as suspicious as a 16-year-old debt, tell them you know the debt is uncollectible. Don't admit to owing anything and don't give them any information, promise to make payments or bargain with them. Don't even waste time arguing. Hang up and get back to the more important things in your life.

See related: Don't restart the clock on expired debts 

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Updated: 01-21-2018