Sulaiman Law Group, LTD.is pleased to announce that our Chicago consumer
lawyers have secured an important victory against Portfolio Recovery Associates
for deliberately using ambiguous collection letters in an attempt to compel
our client to pay a legally unenforceable debt. The decision was issued
by a three-judge panel of the 7th U.S. Circuit Court of Appeals on Wednesday,
In its ruling, the 7th Circuit Court upheld a ruling from a lower court
that Portfolio Recovery, one of the nation’s largest debt collectors,
violated the Fair Debt Collection Practices Act (FDCPA) when it attempted to collect on debt without informing the consumer that
it was time-barred.
Our legal team believes this decision was a significant victory for consumer
rights, as time-barred debt collection has become a common, and often
deceptive, tactic employed by many lenders and collection agencies across
Time-barred debt collection occurs when banks and debt collection companies attempt to collect debt
that they can no longer legally report on a credit report or file lawsuits over.
Among the many concerning issues inherent to time-barred debt collection
is the fact that lenders and collectors are commonly intentionally vague
about the status of debt, and often omit key information when informing
consumers that they owe money. What’s more, once a borrower pays
even a penny toward the time-barred debt, it restarts the clock, and opens
the door to a debt collector filing suit for the full amount of debt owed,
including interest and fees.
While the decision can help raise awareness about time-barred debt and
set a precedent for holding lenders and debt collectors accountable when
their collection practices violate the law, it is still important for
consumers to understand their rights when it comes to debt collection.
Here are few points to remember:
- When it comes to older debts, collection agencies might not have the legal
ability to collect them or file lawsuits against you. This is because
debt collectors have a limited amount of time – the statute of limitations
– to file suit against consumers in order to collect debt.
- After the statute of limitations runs out, unpaid debts are referred to
as “time-barred.” Under federal law, debt collectors cannot
file a lawsuit against you for not paying a time-barred debt. However,
a new statute of limitations can be started on old debts under certain
circumstances, such as when a consumer makes a payment. When this is the
case, collectors can sue.
- The statute of limitations may vary from state to state and for various
types of debts. In Illinois, for example, the statute of limitation for
credit card debt may be 5 or 10 years, depending on whether there was
a written contract.
It is important to note that debt collectors are able to contact you about
old debts that are time-barred, and they may inform you that a debt is
past the statute of limitations and that they cannot file a lawsuit if
you do not pay. If the collection agency does not inform you an old debt
is now time-barred, but you have reason to believe it could be, you have
the right to ask if the statute of limitations has run out. Debt collectors
are legally obligated to tell you the truth if they answer, but some may
avoid answering. To protect yourself, ask when the last payment was made,
which can help you in determining when the clock started for the statute
of limitations. You can also tell them you would like to verify and dispute
the debt, which prevents them from engaging in collection activities until
they verify whether the debt is not time-barred and they can legally enforce
Whether or not you choose to pay a time-barred debt is your decision, and
you do have options. However, these options may come with consequences.
For example, you can choose to not pay a time-barred debt, but may face
credit consequences. Collection agencies will still be able to contact
you regarding the time-barred debt. However, you can send a demand letter
to stop communication. You may also choose to make a partial payment toward
a time-barred debt, but this will restart the statute of limitations and
allow collectors to sue you for the full amount of debt, including interest and fees.
In addition to these two options, you can also choose to pay off the debt
completely, or even negotiate a payment amount that is less than what
you owe. If you choose this option, be sure that you have a signed agreement
from the collection agency that paying the debt or negotiated amount will
relieve you from further obligations
before you pay. Our legal team can assist you in exploring the most appropriate
option for your situation, take the necessary steps toward addressing
debt and other related issues, and also help you take legal action when
debt collectors violate your rights under the Fair Debt Collection Practices Act.
If a debt collector contacts you about an old debt, it is wise to speak
with an experienced consumer lawyers, as debt collectors may be in violation
of the Fair Debt Collection Practices Act. Our legal team is readily available
to review your situation and help you determine the appropriate plan of
action. Contact Sulaiman Law Group, LTDf. to speak with a member of our