Can debt collectors re-age an old debt? 5 things to know now — CBS News — Top

RESOLVING THE LEDGER

Can debt collectors re-age an old debt? 5 things to know now — CBS News — Top | AIPROPX

Old debts have a way of resurfacing when borrowers least expect them. In some cases, you learn about the resurfaced debt when a collection letter arrives years after you\u0027ve stopped thinking about the unpaid account. In others, an unfamiliar debt buyer starts calling. And, in some cases, a collection account suddenly appears on your credit report under a different company name. However it happens, it makes sense to wonder why it\u0027s happening \u2014 and whether the debt has somehow become "new" again.This type of issue can happen in nearly any landscape, but it\u0027s particularly concerning right now, as delinquencies are ticking up and household debt remains at a record high. As the economic hurdles loom, more borrowers are falling behind on what they owe. As those accounts remain delinquent, it\u0027s common for them to change hands over time. When that happens, it\u0027s not uncommon for the information tied to the account to change, particularly the date in which the account first became delinquent.But while debt collectors have broad authority to pursue legitimate unpaid balances, there are important legal limits, particularly when it comes to changing the age of the debt. So, can a debt collector re-age an old debt, or are there guardrails in place to prohibit those types of actions? That\u0027s what we\u0027ll examine below.Learn how to tackle your unpaid debt problems today.Can debt collectors re-age an old debt?A re-aged debt is one in which the reporting timeline has been improperly changed to make it appear newer than it actually is, allowing it to stay on a credit report longer than the law generally permits. If this happens to your unpaid debts, it can have real financial consequences for your credit score, borrowing options and confidence in how to respond to collection efforts.That said, the practice of re-aging debts is generally prohibited by law. Debt collectors typically cannot legally re-age an old debt simply by buying it or transferring it to another collection agency. The original date of delinquency \u2014 which is the point when you first fell behind and did not bring the account current again \u2014 is what should determine how long most collection accounts can remain on your credit report. That timeline generally cannot be reset by selling the debt to another debt collector.That said, there are a few other things borrowers should know about re-aged debt, including the following:It\u0027s explicitly illegal under federal lawUnder the Fair Credit Reporting Act, the date of first delinquency generally can\u0027t be changed once it\u0027s established. Negative information tied to that delinquency date must fall off your credit report after seven years, no matter how many times the debt is sold or reassigned to a new debt collector.The Fair Debt Collection Practices Act separately prohibits debt collectors from misrepresenting a debt\u0027s legal status, which includes treating a time-barred debt \u2014 meaning one that has aged out of the statute of limitations for collections \u2014 as though it\u0027s still enforceable. Violating either law can expose a debt collector to statutory damages.Find out how the right debt relief strategy could benefit you now.It usually shows up as a mismatched dateThe most common version of re-aging an old debt is a new collection agency reporting the aging debt with a current "date opened," making a balance that\u0027s several years old look like it just originated. The tell is often a discrepancy between the original creditor\u0027s charge-off date and whatever date the current debt collector is reporting. If those two numbers don\u0027t line up, that\u0027s the first thing worth flagging.A recent payment claim can be a red flag, not a courtesySometimes re-aging is more subtle, with a debt collector referencing a payment or account activity that never happened. This occurs because in many states, even a legitimate token payment on a collection account, or even just acknowledging that the debt is yours, can restart the clock on the statute of limitations. Debt collectors know this, which is why some will try to get borrowers to make a small "goodwill" payment on an old debt without explaining what that payment could legally trigger.Statutes of limitations vary widely, so context mattersHow long a debt remains legally enforceable depends heavily on where you live and what kind of debt it is. The statute of limitations on debt typically stretches anywhere from three to ten years, depending on the state and whether the debt is based on a written contract, an oral agreement or another related factor. A debt that\u0027s time-barred in one state might still be fair game in another, which is exactly why debt collectors will sometimes lean on the ambiguity rather than volunteer clear information.You can dispute it, and the bureaus have to respondIf you find a re-aged debt on your credit report, you have the right to dispute the validity of the debt. Start by pulling your credit reports and lining up the dates of the original charge-off date, the date the current debt collector reports as the account\u0027s origin and the date of last payment. If there\u0027s a discrepancy, you can dispute it directly with the credit bureaus, which are required to investigate the issue within 30 days. You can also send the debt collector a written debt validation request, forcing them to document the debt\u0027s actual age and chain of ownership \u2014 which is paperwork that often can\u0027t be produced for re-aged accounts.The bottom lineDebt collectors are not permitted to manufacture a fresher timeline for an old debt, but given the incentive they have to do so, it\u0027s a relatively common issue borrowers face. The defense is mostly a matter of literacy: knowing your state\u0027s statute of limitations, checking that the dates on your credit report actually match your payment history and treating any contact about a very old debt with a healt...