If you are being sued by a collection attorney for a debt, make sure that the debt has not expired. Before making any agreements or payments, it is first important to understand the basic laws related to debt collection. Few people know that there is a statute of limitations on debt, meaning once this period of time has passed, creditors and debt collectors can no longer sue you for repayment of the debt. While the statute of limitations for debt collection varies by state, in Michigan creditors and debt collectors have 6 years from your last date of payment to sue you. It is important to note that creditors are allowed to continue attempting to collect debts after the statute of limitations has passed, and some will even still try to sue for payment in hopes that you do not know the law. When dealing with old debt, remember these facts:
Be careful not to restart the statute of limitations time period
Some debt collectors might realize your debt is near, or beyond the statute of limitations so they offer you installment options in hopes that you will make even one small payment to revive the debt. While it is your decision if you decide to start making payments, it is important to note that once you pay any amount toward the balance, you will completely reset the statute of limitations from the date of that payment.
If you are sued, it’s your responsibility to tell the court the debt is old
The Consumer Financial Protection Bureau advises that even if a debt is beyond the Statute of Limitations, a court could decide to award judgment to a creditor if you do not use the statute of limitations as a defense. This means you cannot simply ignore a summons received in the mail. It is your responsibility to respond to it, and point out the debt is old if that is the case.
You can send a cease and desist letter
If you no longer wish to be contacted for payment on the account, you can send a written cease and desist letter advising that you no longer wish to be contacted regarding the specified debt. Under the Fair Debt Collection Practices Act (“FDCPA”), debt collectors can no longer communicate with you with regarding the debt once you provide this written communication.
Credit reporting agencies can still report the delinquency for 7 years
The credit reporting agency timeline differs from the statute of limitations. Therefore, if you decide to stop paying a debt, remember this can have a negative effect on your credit report. While the Michigan statute of limitations to sue for a debt is 6 years, federal law states that delinquencies remain on your credit report for 7 years from the date of the first delinquency. However, if you still find negative items that are more than 7 years old on your credit report, you do have the right to have the outdated information removed from your credit report under the Fair Credit Reporting Act (“FCRA”).
No matter how old a debt is, no debt collector has the right to contact you about a debt that is not yours, or a debt for which you submitted a written request to cease communication. Likewise, no credit reporting agency is allowed to keep an outdated negative item on your credit report. If debt collectors are threatening you for payment, or if a credit reporting agency has incorrect information on your credit report, then please call Michigan Consumer Credit Lawyers toll free at (888) 293-2882 for a free consultation. Under the law, you can hire lawyers for free who straighten out your credit report and stop debt collection harassment. You can also email Attorney Gary Nitzkin at gary@micreditlawyer.com.
For more information about your credit rights as a consumer, visit our blog at www.micreditlawyer.com/blog. Also visit our website at www.micreditlawyer.com for excellent videos about how to protect your credit under the FCRA and FDCPA laws.
The post Do you know your debt’s expiration date? appeared first on Michigan Consumer Credit Lawyers.