What’s the “statute of limitations” on a bad debt?
According to the Consumer Credit Commissioner, a debt can only be collected for four years after it was earned. After four years, the debt is considered uncollectable. That doesn’t mean you’re completely off the hook. The notation of the bad debt can appear on your credit report for as long as seven years if it was entered prior to the four year deadline. Q: Can a collection agent threaten legal action if payment isn’t made immediately? They can threaten it, but it’s highly unlikely that a court action will be successful (or profitable for the agent) if the debt is more than four years old. If less, the agent can make notations of non-payment on your credit record, and, if necessary, get a court judgment against you for the amount owed. Q: A collection agent says I owe money on a cell phone bill that’s three years old, but the company closed down and I’ve received no notice of the money I’m supposed to owe. How can they collect for a business that no longer exists? It’s fairly typical
