Rachel Hunter, J.D.

Paying Time-Barred Debts

Even though a debt is barred by the statute of limitations, it does not mean that you don’t owe the debt. The statute of limitations is a legal defense – it only applies in court. That means that a debt collector is free to continue to try to collect on the debt. Should you pay? While you may no longer have a legally enforceable duty to pay, you may still have a moral duty to pay your bills. More importantly, you may have good reasons for wanting to pay, such as refinancing your home or getting a car loan at a decent rate of interest.

For debts that you believe may be time-barred, never agree that this is your debt or make a partial payment thereon without first talking to a lawyer and being apprised of your rights. Even if it is your debt and you feel obligated to pay, don’t just pay. If you want to pay something, that is fine, but you don’t want to accidentally revive the statute of limitations. Also you may settle a debt with a debt collector only to find out that the balance on the debt has been re-sold to another junk debt buyer, and unless you have proof then you may end up having to pay the same debt twice.

I thus recommend that you get an attorney to make sure that the debt is resolved correctly. However, if you are doing this on your own, always get a written agreement with the debt collector as to the terms before you pay. Never pay by a check by phone or personal check. Instead, get a cashier’s check, make a copy of the check and send it either by certified mail, return receipt requested or by UPS or FedEx (if the latter, make sure that you get the debt collector’s physical address). Once the payment is received, usually about 30 days later, call the debt collector and get a settled-in-full letter acknowledging that your payment was made and that no further monies are owed. Keep a copy of the check and the letter forever as debts have a way of re-surfacing (see Zombie Debts)!

Copyright (c) 2012 by Rachel Lea Hunter

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