Debt Collecters

I had a credit card that was charged off. It is no longer listed on my credit report. I have a collecter calling to settle. Do I have to settle?

Comments for Debt Collecters

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Sep 29, 2010
Debt Collector and Charged Off Debt
by: Mary

Thanks for submitting your debt collection question on our Q&A page.

No, you do not have to settle the debt just because a debt collector is demanding that you do so. In fact when it comes to your charged-off debt, settling it is probably not a good idea. There are a couple reasons why.

First, as you indicated, the debt no longer appears in your credit files, so it's not affecting your credit scores. (Most past due debts are reported to the credit bureaus for 7.5 years after the date that the last payments on the debts were made.)

Second, the debt you are concerned about may be old enough that that the statute of limitations on it has expired. If that's the case, you cannot be sued over the debt. (Each state determines the duration of the statute of limitations on particular types of debt. You can find out what statute of limitations applies to your debt by calling your state attorney general's office or the office of a consumer law attorney in your area.) However, if you admit that you owe a debt for which the statute of limitations has expired -- by agreeing to settle the debt, for example -- you may reset the statute of limitations, which means that it would begin running all over again. If that were to happen, the debt collector would be entitled to sue you for the money you owe.

Third, if you settle the debt with the debt collector, the settlement may show up in your credit history and could cause your credit scores to plummet.

Bottom line, there are good reasons why settling the debt that the debt collector has called you about is not a good idea.

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