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The call of a debt collector is a call that many people have experienced over the last few years. Most debt collection agencies are respectful when they are attempting a collection, but some companies are trying to collect past debts that the individual is not obligated to pay because the debt has expired. Knowing what expired debt is can save a person from a great deal of debt harassment, often from debts that the person may have never known existed.
Expired debt is a debt that has not any type of activity on the account for seven years. A person is not obligated to pay debts that are more than seven years old because of the statute of limitations that have been placed on the collection of debts in the United States. These laws were created to prevent debt collection companies from trying to collect debts that are impossible to validate.
Even though attempting to collect expired debt is technically prohibited, there are debt collection companies that try to collect these debts anyway. These companies rely on the lack of knowledge of the laws for debt collection to collect money that they are not legally entitled to. These companies have nothing to lose because generally all they have invested in the account that they are attempting to collect is time. Your advantage in this case is that they can not use the court systems to impose judgments, liens, wage garnishments or any other form of payment for that matter.
In many cases, companies collecting on these debts are not the original account holder and have purchased the debt from the account holder for pennies on the dollar. Sometimes, the company that is attempting to collect the debt has been assigned to the account from another company that was unable to collect on the debt while it was still valid. This means if they can collect any portion of the expired debt, it becomes nearly 100% profit for the debt collection company.
Because collecting these debts can be so profitable, many of these companies use very aggressive collection tactics in order to scare the person into paying the debt without asking too many questions. The tactics that are used by these companies would not be used by a legitimate collection agency because they would be worried about being held accountable for their actions in court. Common tactics include threatening legal repercussions for not paying the debt, making frequent and harassing phone calls, and bothering the person at their place of employment. If you have experienced a debt collection company using any of these tactics, you can report them to the Better Business Bureau or to the Attorney General under the Fair Debt Collection Practices Act.
