Can new creditors collect on 20-year-old debt?
If a credit card company has charged off a debt, can they still sell that debt to someone else who can come after it? I’m currently receiving calls about a debt that’s more than 20 years old. Do you have any suggestions?
Dear Dave,
If a credit card company has charged off a debt, can they still sell that debt to someone else who can come after it? I'm currently receiving calls about a debt that's more than 20 years old. Do you have any suggestions?
Lisa
Dear Lisa,
Charging off a debt doesn't mean that the right to collect has been given up or revoked. All it means is that the debt is no longer on their books as an asset. They don't think they're going to collect, but it doesn't mean that the legal right to collect has ended.
The real problem here is whether or not the debt is outside the statute of limitations. I'm guessing that after 20-something years it has passed, but check with a lawyer in your state to make sure. Another issue is when someone buys and tries to collect on a 20-year old credit card debt, they paid about five cents on the dollar for it. These debt collectors are the worst type of bottom feeders.
If they call, just hang up on them unless they're willing to be respectful and reasonable. You can probably settle this for 10 or 15 cents on the dollar, and get them out of your life for good.
-Dave
Dave Ramsey is America's trusted voice on money and business. He has authored five New York Times best-selling books: Financial Peace, More Than Enough, The Total Money Makeover,EntreLeadership and Smart Money Smart Kids. The Dave Ramsey Show is heard by more than 6 million listeners each week on more than 500 radio stations. Follow Dave on Twitter at @DaveRamsey and on the web at daveramsey.com.