Time-barred debts are one of the most misunderstood aspects of the entire debt collection industry, but the basic information that explains them and how they work is relatively straightforward.
The key to understanding any time-barred debt situation is to know and understand the rules at play before making any decisions or payments.
What is a Time-Barred Debt?
A time-barred debt is an outstanding debt that is past the statute of limitations for that state. In California, the statute of limitations for most written debts is four years. One notable exception is state tax debt, which carries a statute of limitations of 20 years.
Once a debt is time-barred, the debt collector can no longer obtain a judgment against the consumer, and the consumer is no longer held to the obligation.
Can a Debt Collector Contact Me About a Time-Barred Debt?
While they no longer have any legal grounds to stand on, many debt collectors will still attempt to collect on time-barred debts, and this is still legal in a surprising number of states.
If you are being contacted by a commercial debt collector about a time-barred debt, the best way to get them to stop is to send them a letter requesting that they cease all contact regarding the debt.
Is Time-Barred Debt Legally Enforceable?
Because a time-barred debt is past the statute of limitations, debt collectors will no longer be able to obtain a judgment against a consumer for that specific debt.
However, one trick that many debt collectors may try to pull is to file in court anyway and hope that the consumer fails to defend themselves. If a consumer ignores these court proceedings, they can end up making things much worse for themselves.
Should I Pay a Time-Barred Debt?
If you are responsible for a time-barred debt, you are under no legal obligation to make any payment on it whatsoever. However, that unpaid collection account may still remain on your credit report.
In many cases, a combination of making good on their word and wanting to get a collection removed from their credit report will inspire a consumer to pay off a time-barred debt.
If you find yourself in this situation, make sure that you have a written agreement in place and make a full payment on the debt.
Can a Time-Barred Debt be Unbarred?
If you make the mistake of making a partial payment on a time-barred debt, you will learn that this is one way to restart the clock and make it unbarred. For this reason, you should never even consider making a payment on a time-barred debt unless you are settling the full amount.
Time-barred debts are not enforceable by law, but that doesn’t mean that debt collectors aren’t going to attempt to convince you to pay them anyway, or even worse, attempt to trick you into restarting the clock. Make sure you always know your rights in any debt collection situation, and never make the mistake of letting a less-than-credible debt collector take advantage of you.
