What to do if I have a 6-year old corporate credit debt and the debt was sold to a collection agency that is now coming after me?

My business went under as did the bank I borrowed from. Is there a statute of limitations on their ability to collect? If not, or if it hasn’t yet been reached, can I negotiate the debt down to a fraction of what I owe?

Asked on January 27, 2013 under Bankruptcy Law, California

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 7 years ago | Contributor

The statute of limitations in California for collection of a debt is 4 years.  But that does not mean that the debt collector will not continue to try and collect even if it is past the statute.  The issue is computing when the statute began to run - date of last payment is most likely it - and if the law in your state allows for a tolling at any point.  In any event, and besides the fact that the statute is most likely over - was the business a corporation or other entity that would protect you personally?  Did the business file bankruptcy? All these things will help.  And I am sure that given these facts you can negotiatie the matter if you so choose.  Good luck. 


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