Should you pay collections debt that's past the statute of limitations?
An old collections balance may have lost its legal bite, but paying it could come with unintended consequences.
Debt accumulation has become a significant issue for many Americans due to high inflation and an unstable job market, making it challenging to manage revolving balances. However, some individuals struggle with old credit card bills and unpaid accounts that resurface due to collection agency actions. The statute of limitations dictates how long creditors and debt collectors can sue for payment, varying based on debt type, location, and state law.
Once this period expires, federal debt collection rules prevent lawsuits over time-barred debts, but this doesn't necessarily mean the debt is forgiven. Making a payment or acknowledging the debt could restart the statute of limitations, giving debt collectors a new chance to sue for the remaining balance. Before deciding, consider the debt's age, whether it's on your credit reports, your willingness to settle, and state law on restarting the clock.
Paying a time-barred debt may be justified in specific cases, but it's crucial to verify the debt, understand expiration dates, and know potential legal consequences before making a payment.
Written by urgent.news from CBS News's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
