Time-barred Debt Collection: Is It Legal?

Some Ohio consumers who are facing difficult times may have to face those never-ending calls from collectors. The federal Fair Debt Collection Practices Act defines a debt collector as an entity who collects debts on behalf of others. This excludes the original creditor that extended the credit. Debt collectors not only collect unpaid debts for others, but they sometimes buy old outstanding debts, and any amounts of money collected will be for their own profit.

What Is Time-barred Debt?

The Federal Trade Commission says it is important for any consumer to know their rights when they receive calls from debt collectors. There is a statute of limitations for debts, and once the debt is older than that, it is classified as time-barred. Debt collectors may not attempt to collect those debts. However, the applicable laws are complicated as they differ from state to state and under certain circumstances a debt can become active again.

When Was the Last Payment?

When a call is received from a debt collector, it is important to find out when the last payment on the debt was made. This is when the clock starts ticking for the statute of limitations. The fact that a debt is time-barred does not mean that the consumer is no longer responsible for it. In some states, even a partial payment or a promise to pay may revive the debt and the statute of limitations period will start all over again.

Learn Your Rights First

Ohio consumers may benefit from learning their rights by consulting with an experienced bankruptcy attorney before speaking to a debt collector. A lawyer can assess the client’s unique circumstances and explain the available remedies for the situation.

Knowing exactly what questions to ask a debt collector and how to respond to their demands may limit the stress caused by these calls. With the support and guidance of a skilled attorney, a consumer can make informed choices that may bring about renewed financial stability, free of debt collection harassment.

Source: consumer.ftc.gov, “Time-Barred Debts“, Accessed on Oct. 7, 2016