What Should I Do Since I Can’t Pay a Really Old Debt?

Question:

Dear Steve,

Hello. I’m a 29-year old. I have had only two credit cards (both closed) and now I have a card from a creditor asking for money. I had the credit card when I was in my early 20’s and they only had a credit line of $1,200. So the debt is quite old now.

I don’t know what to do. I can’t afford to pay, I either don’t make enough money to support myself or with the current coronavirus, I still can’t pay. I don’t want to get in trouble with the creditor. I might send a validation notice if that helps me.

Janet

Answer:

Dear Janet,

This advice might be controversial but stick with me for a minute.

From what you have said this debt may be more than six years old, or older. It is not clear who has approached you for repayment. Is it a debt collector or the original creditor? Post your response in the comments.

Now here is the controversial part. Given your statements about the current coronavirus situation and your inability to pay, I would do absolutely nothing at this point. And I mean nothing. Don’t talk to them, respond to the notice, or send a validation letter.

You don’t want to do anything that accidentally restarts the Statute of Limitations (SOL) clock. The SOL protects you if you are sued over the debt. You can raise it as a defense and if the court finds the debt is outside the SOL then the case can be dismissed.

Communications with the collector and/or making a payment can reset the SOL time to zero.

I’m not saying you should dodge a valid debt but you’ve said you can’t afford to make a payment this time.

Sometimes the best thing to do when you have a well-informed plan is to do nothing. There is no obligation to react if there is no need at this time.

Let me know in the comments or contact me again here if you get more action from the creditor.

Until then, just save the notice you received in a safe place and keep a diary of any communications you may have with the creditor or collector.

If you do get a collection call about this old debt, you don’t need to be rude to the collector. Just say goodbye and hang up.

If you want to get a definitive point of view if the debt is outside the SOL already, you would need to talk to a lawyer that is licensed to practice law in your state.

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