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The difficulty with collecting old debts

Debt collection agencies often have trouble collecting on accounts that have been outstanding for many years. Although debt collectors are allowed to try and pursue payments for as long as they choose, they may not be able to file a lawsuit against a consumer if the statute of limitations has expired in a given state, according to MSN.

The source noted that under regulations outlined in the Fair Debt Collection Practices Act (FDCPA), collectors are barred from telling an individual that an old debt is detrimental to their score. This is because after seven years, unpaid accounts fall off consumer credit reports. If the statute of limitations has indeed passed, consumers have little reason to pay off an account.

However, if a debtor makes a partial payment on an old debt, they reopen the account for standard collection practices. This means the statue of limitations is nullified and collectors can again sue for outstanding amounts.

Although there are legal penalties – such as lawsuits – that can be levied against debtors, levying the threat of being arrested is highly illegal. According to KTNV-TV, a Las Vegas area woman was contacted and threatened by an apparent debt collector. The caller claimed that he would have the woman arrested at her work if she did not pay two separate $1,000 debts that she owed.

After a short investigation, the news source found that the call did not originate from the debt agency that it claimed to be from. Most likely, the call was made by a scammer.

This shows that debt collectors are better served at strictly adhering to FDCPA regulations. Doing so can go a long way in establishing trust with a debtor and will make it more likely for an account to be closed in a respectful and professional manner.