In many states, debt collectors lose the right to sue consumers after a period of anywhere from 3 to 5 years. However, if a consumer makes a payment – regardless of whether they do so intentionally or otherwise – it restarts the clock on debt collection and allows debt collectors to “get around” the statute of limitations on collecting old debt.
To illustrate how it can happen, consider someone who falls hopelessly behind on a store credit card. As the years tick by, the consumer may believe they are in the clear because, in many states, debt collectors lose the right to sue for older debt.
However, debt collectors are not easily deterred; many are suing in the 11th hour to keep old debt alive. If collectors win a judgement to garnish one payment – even as little as 10 cents of remaining debt – the entire debt resets to the date of that payment adding years before the statute of limitation kicks in again.
So far the practice of either garnishing a payment or luring consumers into making a payment to reset the statute of limitations has allowed the debt collection industry to bring in tens of millions of dollars in debt annually. Unknowing consumers may be contacted out of the blue regarding an old debt and asked to make a small payment to halt collection calls in a Hail Mary attempt to revive the debt. Others may be offered a credit card to let them pay off the old debt, unknowingly resetting the clock for collection of the debt.
Because consumers are often not savvy to federal and state laws regarding what many call zombie debt, they do not understand the consequences of making a payment on old debt. To make matters worse, old debt often lacks reliable records putting consumers in an especially vulnerable position when collections go beyond what they may actually owe.
When you are contacted by a debt collector, it is important to seek the help of an experienced debt relief attorney before doing anything and it is especially important to know your rights when you are contacted by debt collectors regarding old debt. Contact the Illinois creditor harassment law offices of Charles E Covey for answers when you are in a difficult financial situation to ensure your rights and best interests are being served at 309-674-8125.