One of the most common questions I am asked is can collection accounts re-age? The answer generally lies between “no way” and “not likely”. While there are very few ways to legally re-age an account, the action usually needs to start at the consumer level (such as starting payment on the old debt). To that point, here is an email I received recently:
I received a letter in the mail from FCO to settle on an old Capital One credit card which charged off in 2007, when I was living in Chicago for college. I now live in the state of Ohio, and I was not aware of this account because my ex-husband took care of all the finances. Back then, was a young woman who let her husband handle everything and I didn’t know that a credit card was placed in my name. There is no trade line on my credit report at this time, how do I handle this 14 year old problem without re-starting the statute of limitation and getting future mortgage application declined?
Real email sent to the website.
No, The Collection Account Re-Age Did Not Occur.
There is a good reason why the 2007 charge-off is not included in this consumers credit report. It is prohibited by legal statute. A charge-off from 2007 would have had a date of first delinquency leading up to the charge-off that was prior to the charge-off status. 14 years is a long time for a zombie debt to sit idle. Remember, collection companies prey on the ignorance of the consumer. The hope here is they will find a willing participant to pay off the debt. If not full payment, possibly enter into a payment plan (which could start the statute of limitations over on the debt). I want to be clear, the debt is still a valid debt and will be valid until it is paid. The difference here is between valid debt, and if the collection company can legally do anything to collect.
Get to Know the FCRA.
FCRA 605(a)(4) in conjunction with 605(c) prevents the credit reporting agency from including a charge-off in a credit report beyond 7 years plus 180 days from the date of first delinquency on the original account. Those dates are absolute, and nothing the debt collector does or reports can change those statutory dates. This prevents collection account re-age. If this appears on a report, both the reporting agency and the collection company could be in trouble. Additionally, presuming the statute of limitations has also expired, the debt would be time-barred, and thus non-collectable. There is no threat of legal recovery.
If you find yourself in this situation, you can simply send the debt collector a cease communication letter under FDCPA 805(c), and forget about them. If they contact you thereafter, it is a violation of statute. They will likely sell the debt to another zombie collector.
Don’t Ignore Debt Forever.
I advise paying these zombie debts for pennies on the dollar if possible. You can choose to ignore if forever if you’d like, but each time they sell the debt you will have to go through the same dance as above. Action taken by one collection company does not inform the next. Pretending debt doesn’t exist is how many consumers end up in trouble.
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