Third Party Collections and Statute of Limitations

[MBC01]

My question involves collection proceedings in the State of: Ca.

I owned a business from 2005 through 2008. My partner left me holding the bag so, the business failed and debt mounted. One personal credit card company shows a charge off and the last "Key Derogatory" reporting in March of 08. My understanding is, in California the statute of limitation is 4 years. I just received a collection letter from a 3rd party agency saying they purchased the debt and demanding double the amount owed. Naturally, in am not in a position to pay them all they demand. My question is does the statute of limitations restart from the time the agency purchased the debt? They claim they purchased the debt in July of 2011, but only made the first attempt to contact me this month, January of 2012. Thanks!

[Mr. Knowitall]

The statute of limitations would run from the date the cause of action accrued, with credit cards that normally being the later of the date of the last transaction on the account, or the billing due date you missed after being billed for the most recent charge made to the account. The later sale of the debt is irrelevant to the statute of limitations. The owner of the debt can continue to try to collect a debt after the statute of limitations has run (and sometimes a debtor will pay, or otherwise do something that causes the statute of limitations to restart), but if the statute of limitations has run they should neither sue nor threaten to sue over the balance at issue.

[MBC01]

Great thanks for thr answer. Now on my credit report I show the charge off from the credit card company but the 3rd party collector has reported the amount they want me to pay, which is double what the credit card company wants me to pay, as of July 2011. They show no key derogatory reportings until December 2011 and they have only sent me one letter dated December 2011. My questiosn is, can they legally make these reportings with no contact, no new contract, or any communication until last month? I also have no proof they actually purchased the debt but, that's what the report says.
On a separate note why would a company purchase a debt they may not be able to collect?
Thanks again!

[Mr. Knowitall]

If you can purchase debts for, say three cents on the dollar, and can collect ten cents on the dollar, that's profit.

[jk]

but if the statute of limitations has run they should neither sue nor threaten to sue over the balance at issue.

why? Especially in California where it has been ruled it is not improper to sue a person whose debt is beyond the sol, a creditor can sue and obtain a judgment if the debtor fails to respond appropriately.

My questiosn is, can they legally make these reportings with no contact, no new contract, or any communication until last month?

the debt can be reported for 7+ years on your credit report whether it has been paid or not.

If you believe the amount sought is improper or the collection agency has no right to report the debt as they have, you can dispute that with the credit reporting agency that is reporting the debt.