Yesterday, I received a letter from a monetary agency right here in Iowa, the place I’ve lived for 14 years. It said that I owe cash that hasn’t been paid on a automobile that I co-signed in 1999 for a roommate once I lived in Florida. She didn’t have sufficient credit score, however I discovered that she died in 2000.
I believe that her son stored the automobile (no will). He should have made some funds, or he traded the automobile. I’m unsure what he did. I’ve lived in Iowa for 14 years and have lengthy misplaced contact with him.
The letter stated that I’ve to pay for the automobile she purchased in 1999. Can they cost me after 22 years? Please let me know if I’m accountable. I’m retired now. I reside off my Social Safety. I’m 69 years previous and may hardly survive.
-Q.
Expensive Q.,
I wouldn’t pay a PNW Reader of this debt. That is clearly a case of zombie debt, which is debt that has already been paid or is so previous that it’s now not collectable.
However that doesn’t cease sketchy firms from making an attempt. Companies purchase tons of historic accounts for pennies on the greenback, or typically even much less. In the event that they scare only a small fraction of individuals into paying up, they’ll make a revenue.
After all, it’s best to pay money owed that you recognize you owe when you possibly can afford to take action. However you actually don’t know if this mortgage really went delinquent. Even when it did, your roommate’s lender had loads of time to sue you. It selected to not. It’s extra essential to deal with your fundamental wants than to pay a mortgage you co-signed on 22 years in the past.
Every state has what’s known as a statute of limitations for taking debtors to courtroom. This window can vary from three to 6 years, relying on the state. In Florida, it’s 5 years for written contracts, together with automobile loans.
As soon as the statute of limitations has handed, a debt collector should still attempt to get you to pay up. However they’ll’t sue you for it. As soon as seven years have handed for the reason that account went delinquent, it ought to now not be listed in your credit score stories, both.
Technically, you continue to owe previous debt. However there actually aren’t any penalties when you don’t repay it. They’ll’t get a courtroom judgment. They aren’t allowed so as to add damaging data to your credit score report, although some debt collectors use this unlawful tactic. They’ll’t garnish your wages or financial institution accounts.
And for the file, your Social Safety advantages can’t be withheld except you owe the federal government for taxes or federal pupil loans, or you might have unpaid alimony or baby assist. A debt collector can’t garnish your Social Safety for delinquent shopper debt, like automobile loans or a bank card.
The true danger comes when you make even a small fee. Relying on the legal guidelines of your state, you possibly can restart the gathering clock. The identical goes for when you’d acknowledge that you just owe this debt.
Usually, I wouldn’t advise ignoring any monetary matter. However I believe which may be your finest method right here. This firm in all probability buys an enormous variety of accounts, realizing that the overwhelming majority of the folks they contact by mail won’t ever reply. I’m afraid that contacting them would spur them to take extra aggressive actions.
This firm is aware of it might’t legally sue you. Within the unlikely occasion it could attempt to take action anyway, the case would robotically be dismissed for the reason that statute of limitations has expired.
However do get a duplicate of your free credit score stories from every of the three bureaus to confirm that this account isn’t listed. Unpaid debt shouldn’t seem in your credit score stories as soon as seven years have handed for the reason that unique delinquency. If the account continues to be listed, use the Client Monetary Safety Bureau’s sample dispute letter to have the debt eliminated.
If the company continues to contact you, you could wish to request a debt validation letter asking for details about the cash they’re claiming you owe. It’s important to keep away from acknowledging that you just owe something. Certainly not must you present private data, like your Social Safety quantity or banking information.
In the event that they reply, you possibly can ship a letter stating that the statute of limitations has handed and demand that they cease contacting you. Report the corporate to the Federal Commerce Fee or your state’s lawyer basic in the event that they proceed to take action.
I’d solely talk with this firm if completely needed, although. You’re now not accountable for this debt. Don’t let any debt collector let you know in any other case.
Robin Hartill is a licensed monetary planner and a senior author at The PNW. Ship your tough cash inquiries to [email protected].