How long does a company/collections agency have to collect on an outstanding bill?

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How long does a company/collections agency have to collect on an outstanding bill?

I was just contacted by a collections agency for an amount supposedly due from 2 years ago. The company owed was a telephone company which was taken over by another company. I can’t get a “corporate” number for the new company to verify the account number, outstanding amount, etc (and the collection agency wouldn’t give me the information without paying up front). Bank records are too old and have been deleted so I can’t search to verify if I ever wrote a check for the same amount. Currently I am trying to buy a house, so I don’t want this hitting my credit report.

Asked on August 3, 2011 Texas

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

A debt owed to a phone company would most  likely be deemed to arise under either a written contract (the service agreement) or to be an open account debt (one there you incur charges as you go). In either event, the statute of limitations is four years; that is, a creditor, or one acting on their behalf, can take legal action up to four years after the default or breach of contrat. (Note: the time period is calculated from when you stopped paying or violated the agreement, not from when the agreement was first entered into.) From what you write, it would therefore seem that a collections agency could still take action. To recover money from you, they will have to be able to prove the existence and amount of the debt, and when sued, you will be able to get the documentation from them (you can and should certainly request  it now). You have certain rights against a third-party debt collector: look up the Fair Debt Collections Practices Act (FDCPA) to see what they are. Good luck.


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