The Today Show's Money 911 on the topic of "Time Barred Debts"

If you receive a letter from a collection agency regarding a really old debt, you can ignore it (if it has already dropped off your credit report) but doing so will mean they will continue to send letters every year no matter where you move to. It also means that they have access to your credit report (as a soft inquiry).

If you want to be rid of it once and for all, you must be very careful as to how you proceed: Here is a suggestion:
Get a free copy of your credit file and be sure the debt in question is no longer being reported.

Send--via certified mail--a copy of the letter you received along with something to this effect:
Dear Sir or Madam:
I am willing to settle the balance of my Time-Barred Debt referenced above for $xx.xx as full and final settlement of the disputed debt originally owed to (name of Bank). (The amount you offer them can either be their offer or a lesser amount--whatever you can afford)

By accepting this letter of settlement, you agree on behalf of (Name of Original Bank) and (Name of Collection agency) to the following:

1) You agree to accept $xx.xx as an agreed full and final settlement of all outstanding charges/fees on the disputed account referenced above.

2) You agree to cease any and all attempts to collect this debt in the future, either directly or through a third-party.

3) You agree not to sell any part of this debt to a third party since you now recognize this account to be "settled as agreed."

4) As a time-barred debt, this account no longer appears on my credit reports and as such you agree to not report the satisfaction of this debt to any credit agency.

Alternatively, (If it has not already dropped off and will not drop off for some time)

You agree to remove any negative report currently associated with this debt and to report it as paid.

Upon receipt of your acknowledgement of these terms, I will forward to your office the agreed amount via certified mail and your agency will be responsible to immediately retract (or not report) any and all negative reports concerning this account.

Kindly reply by return mail with confirmation that you will accept this amount (or lesser amount) as full satisfaction of this debt.

Thank you for your cooperation in this matter

Category:

Howto & Style

Tags:

• Old
• Debts
• Time
• Barred
• Debt
• collection
• agency

[roxcyn]

This is a financial advisor!? He didn't even answer the question correctly! The credit report is 7 years from the delinquency date to when it falls off. Also, if you want new credit having something unpaid won't help. If it's a utility bill you could still have to pay even if it's time barren--many don't give service without paying outstanding balance.

[julzheimer1]

He's flat out wrong, about a few things. First off, he's confusing the "right to sue for contract debt" statute of statute of limitations and the "how long it can be reported to the credit bureaus" statute of limitations. Second, the statute of limitations to sue on contract debt in TX is 4 years, yes, but the debt would have had to have been incurred in TX. If the consumer moved to TX from another state where the debt was originally incurred the THAT state's statute of limitations rules

[johnlouisville]

This man is incorrect....he's confusing the statute of limitations with the 7 year time period that bad debt can stay on credit reports.....The 7 year time period is fixed.