Does Debt Collection Ever Stop?

Distraught young woman reading bill.

The following is presented for informational purposes only and is not intended as legal advice.

If you've ever had the misfortune of having a debt fall so far behind that it gets charged off and moved to a professional debt collection agency, you may have wondered, "Is this ever going to end?"

Debt collection efforts can be relentless at times, and even debts that seem minor may end up haunting you for years if ignored.

Luckily, while debt collectors may never give up on a debt, your responsibility to repay a debt is rarely eternal. In this article, we'll explain why debt collection could be forever, why it really isn't forever, and how you can deal with a lingering debt.   

Resolving Debt Collection

Debt collection is the process by which creditors or collection agencies seek to recover money owed by individuals or businesses. From credit card debt to a dentist bill, if you owe money and don't pay it, after a few months it's quite possible that you'll be dealing with debt collectors

The fastest way to resolve a debt and get debt collectors to leave you alone is to pay the debt. You could pay it in full all at once, or negotiate a payment plan. 

Once a debt has been charged off and reached the hands of a debt collector, though, you may be better off negotiating a debt settlement. In a settlement, you pay back only a percentage of the original debt. Creditors typically don't settle on debts in good standing, but debt collectors are more likely to take as much as they can and call it a day.

What If You Don't Pay?

But if you don't pay outright or agree to a settlement, then you could be hearing from the debt collector for a long time. That's because debt collection doesn't technically have an expiration date. Creditors can pursue outstanding debts for an indefinite period.

If the debt is large enough, the debt collector may even sue you for the unpaid debt. If you lose the case, the most likely outcome is that the creditor will be allowed to garnish your wages, taking a percentage of your income until the debt is repaid.

All that said, just because a debt collector can continue pursuing the debt indefinitely, doesn't mean that you're always going to be legally responsible for repaying that debt.

The Statute of Limitations on Debt

Fortunately, the pursuit of debt does have certain legal limitations, which vary by jurisdiction and the type of debt. These limitations are often referred to as the "statute of limitations."

Every state has a set of rules governing their own statute of limitations on a debtor's responsibility to repay a debt, but the basic idea is this: after a certain period of time your legal obligation to repay a debt expires. The time period can swing dramatically depending on the type of debt and the state you lived in when you created the debt, from as little as three years to as many as 15 years.

It's important to know that just because a debt's statute of limitations has expired, that doesn't mean that a debt collector can't or won't try to collect the debt. They can keep trying to collect your debt until the sun explodes. But once the statute of limitations has expired, you're not legally obligated to make a payment. This is most important to keep in mind in the event that the creditor tries to sue you for the debt.  

Strategies to Stop Debt Collection

So let's summarize your options for making debt collectors go away. If the debt is valid and your legal obligation to pay it hasn't expired, your first option is to make an effort to pay off the debt.

Debt consolidation

One effective strategy to halt debt collection efforts is debt consolidation. If you qualify, you may be able to create a new loan which is used to pay off your outstanding debts. By consolidating multiple debts into a single, manageable payment, you can regain control of your finances and cease the relentless collection calls and letters.

Debt management plan

A debt management plan (or DMP) is a debt consolidation option typically offered through nonprofit credit counseling organizations. It's not a loan, so it's good option if your credit is low, but it does consolidate your debts into a single payment, usually with substantial interest rate reductions. Most importantly, it's a great way to get collection activity to stop, as collectors are usually satisfied once they start receiving regular payments. 

Negotiating with creditors

Whether you can pay all or only some of the debt, open communication with creditors is key. Initiating negotiations and reaching an agreement can lead to a halt in collection activities, making it easier for you to work towards a debt-free future.

Requesting that the collector stop contacting you

If the debt isn't legitimate or the statute of limitations has expired, you may just want the debt collector to leave you alone. And you have the right to request that they do. Send the collector a letter by certified mail advising them to no longer contact you about the debt. They're required to respect the request and discontinue contacting you.  

If you've been dealing with lingering debts and don't know how to best address the situation, MMI offers free financial counseling. We can review your debts and provide suggestions on the best way to get out of debt and reach your biggest money goals. Counseling is available 24/7, online and over the phone.

Tagged in Debt collection, Laws and legal questions

Jesse Campbell photo.

Jesse Campbell is the Content Manager at MMI, with over ten years of experience creating valuable educational materials that help families through everyday and extraordinary financial challenges.

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