If you have old debts, collection agencies or debt collectors may not be able to sue you for collection, but if the debtor sues you, don't worry, you are not alone. The state also grants you a right and helps you as well as we help Americans answer debt-collection lawsuits. This is because debt collectors have a limited number of years - known as the statute of limitations - to file a collection case. After this period expires, your debts will be considered "determined". By law, a debt collector cannot sue you for failing to pay a specific debt.

This can be a somewhat confusing topic for consumers because the statute of limitations varies by state and by different classes of debt. It can also be a tricky subject because under certain circumstances the clock can reset and then the applicable time period will reset. For these reasons, the Federal Trade Commission (FTC), the national consumer protection agency, believes it is important that you understand what your rights are if a debt collector contacts you to try to collect an old debt from you.

The Fair Debt Collection Law defines a collector as anyone who regularly collects debts owed to third parties. This term includes collection agencies, attorneys who collect debts on a regular basis, and companies that buy unpaid debts to try to collect them. The term 'debt collector' does not include original creditors attempting to collect debts from their own debtors.

When a debt is considered too old for a collector to sue a debtor?

Generally, the statute of limitations is established by state law. Usually, the clock starts working from the moment you default on payment; and when the clock stops depends on two factors: the type of debt and the applicable law, either that of your state of residence or that of the state specified in your credit agreement. For example, in a few states, the statute of limitations for credit card debt can be 10 years, but in most states, a period of between three and six years is imposed. To determine the statute of limitations applicable to the different classes of debt under each state law, consult a legal advisor and attorney or ask the Office of the State Attorney General.

The statute of limitations on a debt is usually different from the period for which the debt is reported on your credit report. Generally, negative information remains on your credit report for seven years.

What do I have to do if a debt collector calls me to collect a prescribed debt?

Debt collectors may contact you to try to collect prescribed debts from you. In that case, they would have to inform you that the debt is prescribed and that they cannot sue you if you do not pay it.

If a collector does not tell you that a particular debt is prescribed - but you think it may have already prescribed - ask the collector if the debt exceeded the time limit established for its prescription. If the collector agrees to answer your question, they are required by law to give you a truthful answer. However, some debt collectors may refuse to answer your question. Another question to ask a collector in case you think the debt may have expired is what the date is entered in your records as the date of your last payment. This is an important point because it helps determine when the statute of limitations clock starts ticking. If a debt collector does not provide you with this information, send them a letter within 30 days of the date you receive a notice notifying you of the debt. In your letter, you have to explain that you are 'disputing' the debt and that you want to 'verify' it. The more information you can give the collector about the reasons for your dispute, the better. Collectors should stop trying to collect the debt from you until they provide you with verification. Keep a copy of your message and verify.

Do I have to pay a debt considered prescribed?

The decision to pay a prescribed debt is up to you. You have a few options, but each option has its consequences. Before choosing an option, talk to an attorney.

• Pay nothing. Although the debt collector cannot sue you to collect the debt, you still owe it. The debt collector may continue to contact you to try to collect the debt from you unless you send him a letter demanding that he stop contacting you. Failure to pay a debt can reduce your chances of getting credit, insurance, or other services, or it can make your cost more expensive because failure to pay can lower your credit rating.

• Make a partial payment. In some states, if you pay any amount of a prescribed debt, or even if you only promise to make a partial payment, the debt "revives." This means that the clock resets and a new period begins to determine the prescription. Often this also means that the debt collector can sue you to collect the full amount of the debt, which can include interest and additional fees.

• Cancel the debt. Even if the debt collector cannot sue you, you can decide to cancel your debt. Some debt collectors may be willing to accept less than you owe to pay off the debt, either in a single, large payment or in a series of lower installments. Before you pay a penny, make sure the collector gives you a signed letter or form. In this document, it must be established that the total debt is being canceled and that the amount to be paid will exempt you from any other obligation. If you cannot get this document, the collector may consider that amount as a partial payment rather than a full payment. Keep a record of the payments you make to pay off the debt.

What should I do if I am sued to collect a prescribed debt?

Defend yourself in court. If you are sued to collect a prescribed debt, take up the matter and respond. Consider talking to an attorney. You or your attorney should inform the judge that it is a prescribed debt, and as proof, provide a copy of the verification provided by the collector or any information you have that proves the date of your last payment. If the judge decides that the debt is prescribed, he will dismiss the claim. Anyway, don't ignore the demand. If you don't respond, the debt collector will likely get a court judgment against you, possibly collecting money from your paycheck, your bank account, or your tax refund
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Enforce your rights under the Fair Debt Collection Law. It is against the law for a debt collector to sue you or threaten to sue you to collect a prescribed debt. If you think a debt collector has acted illegally, file a complaint with the FTC and with the appropriate state Attorney General's office, and consider speaking with an attorney about bringing your own private action against the collector for violating the provisions of the Fair Debt Collection Law.

This is terrible. It's better not to have debts and not to get involved with credit institutions.

First of all, it should be said that debt collectors are, first and foremost, lawyers. Still, the law requires that collectors provide legal advice and represent the client's interests when dealing with the debtor in court and other state bodies. So the collector can act on behalf of their legal entity. Even then, no one has the right to threaten you or your loved ones. Private Debt Collectors have limited power, mainly when the debt has been sold into private hands; there is more you can do than if the debt was bank debt. In any case, it is best not to take the situation to a lawsuit.