Rachel Hunter, J.D. | Article

Revival of Time-Barred Debts

Although a debt is barred by the statute of limitation and even though a debt collector may be barred from misrepresenting the status or character of a debt, not all debt collectors are nice. If they told a debtor that a debt was barred, few debtors would ever pay voluntarily. Consequently, some debt collectors may resort to misrepresentations to try to get the debtor to acknowledge or affirm the debt or even make a payment thereon. If this happens, especially if you make a payment, it will “revive” the debt and cause the statute of limitations to start running anew. Recently, a very large junk debt buyer called Asset Acceptance got into hot water for a range of misrepresentations it made regarding time-barred debts. You can read about the settlement here: http://www.ftc.gov/opa/2012/01/asset.shtm.

A new twist to this wrinkle has arisen. As more credit lenders are affected by the economy, they are looking for new revenue streams. One way to lure customers in and revive old debts is to offer the customers new credit cards and transfer the balance from the time-barred debt onto the new card. As soon as the debtor makes a payment, the debt is revived. You can read about it here: http://finance.yahoo.com/news/bringing-expired-debt-back-to-life.html. If you have received an offer like this, before you pay, have the offer reviewed by an attorney or take the precautions outlined in my article, Paying Time-Barred Debts, before you make a costly mistake.

Copyright (c) 2012 by Rachel Lea Hunter

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