Legal Question in Credit and Debt Law in Texas
Re-reporting 7 yr. old debt on Credit Report
In July 2003, two negative lines fell off of all of my credit reports, because they were over 7 years old. The first negative line was from the credit card company. The second negative line was from the collection agency that the credit card company sold the account to not long after the account was charged-off at the credit card company. In January 2004, I received a letter from a new collection agency saying that the original debt that was sold to the first collection agency and had since fallen off my credit report had been sold to this new collection agency. I have not made any contact with this new collection agency but have received two letters from them (one offering a settlement of about 1/3 of the original debt). Q1: Is it possible for this new collection agency to report the debt (that had already fallen off my credit report) back to the credit reporting companies for another 7 years? Q2: Is it possible for this new collection agency to take any legal action against me since the original debt is over 7 years old?
2 Answers from Attorneys
Re: Re-reporting 7 yr. old debt on Credit Report
Re-dating an old debt is a violation of the federal Fair Credit Reporting Act. Let the debt collector know that re-dating and reporting the debt would be improper.
The statute of limitations is an affirmative defense to a lawsuit, essentially barring any recovery. However the debt does remain, and the holder of the debt instrument can legally attempt to collect the debt. If you give them written notice that collection by lawsuit is barred by limitations, and they proceed to sue anyway, that would be a violation of the Fair Debt Collection Practices Act.
Re: Re-reporting 7 yr. old debt on Credit Report
The law is not real settled on the subject of collecting debts outside the statute of limitations. It is not per se a violation of the Fair Debt Collection Practices Act to attempt to collect a debt outside the statute of limitations or even to file suit - an argument can be made that it is an affirmative defense which must be raised. The collection agency can continue to try to collect the debt. You can send a cease and desist letter telling them that pursuant to the FDCPA you prefer to deal with the original creditor. As to reporting it on your credit report, if it is past the seven years, it should not be re-reported. I would check it, however, because it often happens that the new collection agency reports it with a new date on it.
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