What You Need to Know About Time-Barred Debt?

Time-barred debts are one of the most misunderstood aspects of the entire debt collection industry but the basic information always explains them and their working process is quite straightforward. The key to understand any time-barred debt situation is knowing and understanding the rule before making any payments or decisions.

What is a Time-Barred Debt?

A time-barred debt is actually an outstanding debt that has passed the statute of limitations for that state. In US, especially in the most states, the statute of limitation for most written debt is four years. One exception is state tax debt having a statute of limitations of 20 years. Once the debt is time-barred, the debt collector can no longer get a judgment against a customer and consumer is left with no payment obligation to a debt collection agency or original creditor.

Can a Debt Collector Contact Me About a Time-Barred Debt?

While they have no legal obligation or the debt collectors has no legal ground to stand on and demand the debt, many debt collectors will keep on trying to collect the time-barred debt. And this is legal in several states in the USA. If you are getting contacted by a commercial debt collection agency, they are doing it legally and the best way to stop them is sending a request letter asking to cease all the communication regarding the debt.

Is Time-Barred Debt Legally Enforceable?

Debt collectors will no longer be able to secure a judgement against a consumer for a time-barred debt since it has passed the statute of limitations. However, a common ruse used by debt collectors is to file a lawsuit anyhow and wait for the customer to withdraw their defence. A consumer may end up making matters considerably worse for themselves if they choose to ignore these judicial procedures.

Should I Pay a Time-Barred Debt?

If you are liable for a time-barred debt, you are left with no responsibilities or legal obligation to make payments on it whatsoever. However, the unpaid collection account will stay on the credit report and it will affect your future loan possibilities. However, a customer will always be inspired on making a good credit report and removing the collection account from the credit report. On that note, they may want to pay off a time-barred debt. If you are in this kind of situation, be sure to have a written agreement in place and make full debt payment.

Can a Time-Barred Debt be Unbarred?

If you make a mistake of making partial payment to a time-barred debt, it will start the payment clock again and make the debt unbarred. For this reason, you should not ever consider making payments of time-barred debts unless you are settling for the full amount.

Time-barred debts are not enforceable by law but that does not mean that the debt collectors of third-party debt collection agencies are not going to convince you for making the payment anyway. Make sure you always know the rights for you in any debt collection situation and do not ever make the mistake of letting a less-than-credible debt collector take advantage of you.