Legal Question in Credit and Debt Law in Virginia

Re: Reinstate a bad debt write-off

There is no legal meaning or significance to a business "writing off" a debt. All that means is that they are accounting for the fact on their books that they are unlikely to collect it. On their books they should not count it as real money when it is improbable that they will ever get it.

However, there is no legal effect of writing off a debt.

Note that there are other situations that may be similar. If a doctor's office or hospital agrees to accept $5000 as FULL and final payment for an $8000 bill, that settlement in compromise can be final and binding. (However, you would have the burden of proving that they really AGREED to accept less than the full amount, and it can get tricky if they deny doing agreeing to that.)

Also, there are humanitarian programs when they may agree not to charge the full amount for those who cannot afford it.

HOWEVER... you ask the question if they can reinstate a debt from 6/01.

The statute of limitations for bringing a lawsuit on a written contract is 5 years from the date when payment was FIRST due and the FIRST payment was missed (and NEVER paid thereafter). That is the date of "breach." The statute of limitations for a written contract is 5 years from the breach.

As a result, if they have not yet filed a lawsuit and have started asking for payment, one seeking to avoid paying would want to delay until 5 years had passed. Also, promising in writing to pay can restart the clock at 0 again.

For a verbal contract, the statute of limitations is 3 years from the last date when service was provided or the last payment you made on the account, whichever was later.