A reader settled a credit card debt 10 years ago, but a new company says he’s still on the hook

3 minute read

Question: In March 2009 I settled a credit card debt through a collection agency at that time. They confirmed with an email entitled settlement agreement. Just the other day I received a letter from another debt collection agency stating I owe the entire amount or pay a settlement amount! Unfortunately, I cannot open the email file. I called the agency and told them this was settled 10 years ago with the date, etc. of my email. He asked me about the date I paid and apparently the date came up as he said he repeated it. He said someone would contact me within the hour, but no one has. I have called every day to speak to a machine and no one returns my call. What should I do?

Answer from Michelle Black, founder of CreditWriter.com…

Hi Inge,

Hearing from a collection agency can be a stressful and worrisome experience. It’s understandable that this call would concern you, especially since you already settled this collection account and it seems like a new debt collector may be trying to take advantage of you. First, sit back and take a deep breath. Based on your description of the situation, it is important that you don’t make any payments until you have confirmed your debts. Luckily, though, you’re also protected by several different laws.

The Fair Credit Reporting Act

The first law that protects you is the Fair Credit Reporting Act (FCRA). Per the FCRA, negative accounts are only allowed to appear on your credit reports for a certain period of time. A collection account in particular can only legally stay on your credit report for up to seven years from the date of first delinquency on the original account.

Let’s say the worst-case scenario happens and the new collection agency tries to add this old, settled collection account to your credit reports. If that occurs, the FCRA gives you the right to dispute the outdated account with all three major credit bureaus (Equifax, TransUnion and Experian). There’s a good chance the account would be deleted from your credit reports with a dispute. However, it’s also possible that the account could be incorrectly verified after your dispute and remain on your credit reports. If that happened, you could likely find an attorney who specializes in the FCRA or consumer law who would be willing to take your case.

The Fair Debt Collection Practices Act

The second law that protects you is the Fair Debt Collection Practices Act (FDCPA). The FDCPA sets the rules that third-party debt collectors (like collection agencies) have to follow when they attempt to collect a debt.

According to the FDCPA, a debt collector isn’t allowed to purposely deceive you. So, trying to trick you into paying a debt you’ve already settled is off limits. That’s not necessarily what’s going on in your situation, but it is a possibility to consider.

Another potential explanation is that your previously settled debt might have been accidentally sold to a new collection agency. In either scenario, the FDCPA gives you the right to send the new collection agency a letter stating that you don’t believe you owe the debt.

Per the Federal Trade Commission, it’s best to send this letter within 30 days of receiving your initial letter (aka validation notice) from the collection agency. If you make the deadline and send your response within 30 days, the collection agency must send you proof or “written verification of the debt,” such as a copy of a bill. It’s also wise to keep a copy of your letter and send it via certified mail with return receipt requested, in case you later need proof that you sent the request.

Finally, it’s possible that you are the victim of an attempted scam. If you think that may be the case you can report the call to the Federal Trade Commission and your state Attorney General.

Time-Barred Debts

Your state may have debt collection laws that protect you as well. For example, debt collectors only have so long to sue you over unpaid debts. Depending on the type of debt and the state where you lived when you took out the debt, that time frame is usually between three and 10 years. Once you’ve passed your state’s statute of limitations, the debt becomes time-barred.

Due to the age of the collection account (more than 10 years old) and the fact that it’s already been settled, there’s likely very little that the new collection agency can do to you, legally speaking. And, if the agency breaks the law and tries to take certain steps anyway (like reporting an outdated account to the credit bureaus), you might even have a legal cause of action against them.

If you feel like this could be a scam or that a collection agency is trying to violate your rights, it could be in your best interest to contact a reputable FCRA or FDCPA attorney for legal guidance.

Good luck!


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About the Author

Michelle Black

Michelle Black

Michelle Lambright Black is a credit expert with over 18 years of experience in the industry, a freelance writer, and a certified credit expert witness. She specializes in credit reporting, credit scoring, the intersection of credit and financing (business, mortgages, credit cards, loans), budgeting, and identity theft. Michelle is the founder of CreditWriter.com and HerCreditMatters.com—blogs aimed at helping people take charge of their credit and finances so they can lead happier, less stressful lives. She’s a firm believer that everyone deserves a second chance (or a 20th chance) when it comes to money management and that any credit situation can be improved with the right plan and hard work. Michelle has written for numerous publications and websites. Her work has appeared with Experian, Forbes, U.S. News & World Report, and Reader’s Digest, among others.


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