Last week there was a story on CNN’s website talking about people in Florida, who thought that they had settled with lenders regarding homes that were foreclosed upon, suddenly getting contacted by, and in some cases sued, by collection agencies. It seems that, by law, if agencies buy debt from lenders that they can go after those homeowners for the difference owed between what was settled for and what was really owed on those homes.

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It seems this is also a special case in that Florida had passed a law in 2013 saying that collection agencies only had a year to go after what’s called foreclosure debt so the figures are astronomical at this juncture. Whether the courts will be able to keep up with it all is questionable but you can bet there are many former homeowners pretty jittery about it all.

The thing is, if you thought that old debt that was sitting on a credit report and has now been removed after 7 years keeps collection agencies from chasing you, I’m afraid to tell you that’s not quite true. What the law says is that credit reporting agencies have to remove any negative reports after 7 years; it doesn’t say you’re absolved from having someone decide to chase you down to pay the rest of what you owe.

You might not think this is all that lucrative a business but it is. Although many people will totally ignore these agencies since they know that most businesses have collected insurance payments for those debts, there are other collection agencies that will purchase the debt from companies that only go after people for 7 years for literally pennies and attempt to go after debtors. Because some people will start paying on these claims, some of these companies can make a lot of money with a little bit of effort.

Of course, you have rights also. For instance, in some states a debt is considered uncollectible if it’s more than 5 years past the last time a payment was made, even if it stays on the credit report. So, you’ll have to do some research to find out how the law works in your state.

Also, you can write a company and tell them you’re not going to pay anything unless they file a claim against you and win a court judgment. This can be a good tactic unless the agency is in your state or somewhat close to you and the debt is high enough to warrant it. Still, if it’s past statute you’ll probably be okay.

So, don’t be surprised if you get a call after many years here and there. Just remember to do some research to find out what your liabilities might really be.

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