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Debt for sale. . .Predators Purchase Your Old Debts to Profit from Your Hard Times

It’s a relatively new and booming business that might surprise you: companies and individuals who buy debts from creditors and then try to collect the money from the debtor. Known as “debt buying,” it often involves the purchase of debts that the original creditor has written off, that have been discharged in bankruptcy, or that you no longer have a legal obligation to pay. Some of these debts have even been paid in full.

Debt buyers may contact you threatening to sue over the old debt. Or, they may try to get you to pay them by threatening to report the debt to a credit reporting bureau in order to damage your credit score. Be careful -- most states have laws that limit how long you’re legally liable for an unpaid debt. Known as the statute of limitations, this time limit prevents you from being sued for very old debts. Be aware that if you make a partial payment on an old debt or even admit the debt is/was yours, you may restart an expired statute of limitations. Also, federal law prohibits the reporting of most debts more than 7 years old to credit reporting bureaus.

Whether the person contacting you is a debt buyer or not, you have certain rights when it comes to dealing with debt collectors, and they have certain obligations to you. For example, a debt collector must give you the name and address of the original creditor you owed the debt to if you make a written request for that information. For more information about the Fair Debt Collection Practices Act, click here.