Beware: Debt Collectors Can 'Re-age' Old Debts to Extend Collection Period
Consumers should be aware of the statute of limitations on debts, which varies by state and debt type, typically ranging from three to six years. Unscrupulous debt collectors may attempt to 're-age' debts, extending the legal collection period, often without borrowers' knowledge.
Re-aging occurs when a borrower interacts with a creditor or collector about an old debt, or makes a payment. This resets the statute of limitations, giving creditors more time to take legal action. Unethical collectors may illegally re-age debts by reporting them to credit bureaus, even if they're past the deadline.
Once the statute expires, creditors can't sue, but they may still pursue collection efforts. Re-aging benefits creditors and collectors, extending their legal recourse. However, it doesn't affect how long negative information stays on credit reports or impact credit scores. For borrowers, it can disadvantageously reinstate liability for old, potentially uncollectible debts.
To protect themselves, debtors should avoid discussing old debts with creditors or collectors and should respond in court if sued. Acknowledging or paying an old debt can reset its statute of limitations, giving creditors more time to take legal action. Understanding these rules can help consumers navigate their debt obligations more effectively.
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