Can I get sued for a automotive mortgage I co-signed 22 yr in the past?

Pricey Penny,

Yesterday, I received a letter from a monetary agency right here in Iowa, the place I’ve lived for 14 years. It acknowledged that I owe cash that hasn’t been paid on a automotive that I co-signed in 1999 for a roommate after I lived in Florida. She didn’t have sufficient credit score, however I discovered that she died in 2000.

I feel that her son saved the automotive (no will). He should have made some funds, or he traded the automotive. I’m unsure what he did. I’ve lived in Iowa for 14 years and have lengthy misplaced contact with him.

The letter stated that I’ve to pay for the automotive she purchased in 1999. Can they cost me after 22 years? Please let me know if I’m accountable. I’m retired now. I stay off my Social Safety. I’m 69 years outdated and might hardly survive.

-Q.

Pricey Q.,

I wouldn’t pay a penny of this debt. That is clearly a case of zombie debt, which is debt that has already been paid or is so outdated that it’s now not collectable.

However that doesn’t cease sketchy firms from making an attempt. Companies purchase tons of historical accounts for pennies on the greenback, or generally even much less. In the event that they scare only a small fraction of individuals into paying up, they will make a revenue.

After all, it’s best to pay money owed that you already know you owe when you possibly can afford to take action. However you actually don’t know if this mortgage really went delinquent. Even when it did, your roommate’s lender had loads of time to sue you. It selected to not. It’s extra necessary to deal with your fundamental wants than to pay a mortgage you co-signed on 22 years in the past.

Every state has what’s known as a statute of limitations for taking debtors to courtroom. This window can vary from three to 6 years, relying on the state. In Florida, it’s 5 years for written contracts, together with automotive loans.

As soon as the statute of limitations has handed, a debt collector should attempt to get you to pay up. However they will’t sue you for it. As soon as seven years have handed for the reason that account went delinquent, it ought to now not be listed in your credit score reviews, both.

Technically, you continue to owe outdated debt. However there actually are not any penalties if you happen to don’t repay it. They will’t get a courtroom judgment. They aren’t allowed so as to add destructive info to your credit score report, although some debt collectors use this unlawful tactic. They will’t garnish your wages or financial institution accounts.

And for the report, your Social Safety advantages can’t be withheld except you owe the federal government for taxes or federal scholar loans, or you will have unpaid alimony or baby help. A debt collector can’t garnish your Social Safety for delinquent client debt, like automotive loans or a bank card.

The true threat comes if you happen to make even a small cost. Relying on the legal guidelines of your state, you can restart the gathering clock. The identical goes for if you happen to’d acknowledge that you just owe this debt.

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Usually, I wouldn’t advise ignoring any monetary matter. However I feel which may be your finest strategy right here. This firm most likely buys an enormous variety of accounts, understanding that the overwhelming majority of the individuals they contact by mail won’t ever reply. I’m afraid that contacting them would spur them to take extra aggressive actions.

This firm is aware of it may well’t legally sue you. Within the unlikely occasion it might attempt to take action anyway, the case would routinely be dismissed for the reason that statute of limitations has expired.

However do get a duplicate of your free credit score reviews from every of the three bureaus (TransUnion, Equifax, and Experian) to confirm that this account isn’t listed. Unpaid debt shouldn’t seem in your credit score reviews as soon as seven years have handed for the reason that unique delinquency. If the account remains to be listed, use the Client Monetary Safety Bureau’s pattern dispute letter to have the debt eliminated.

If the company continues to contact you, chances are you’ll need to request a debt validation letter asking for details about the cash they’re claiming you owe. It’s important to keep away from acknowledging that you just owe something. In no way must you present private info, like your Social Safety quantity or banking information.

In the event that they reply, you possibly can ship a letter stating that the statute of limitations has handed and demand that they cease contacting you. Report the corporate to the Federal Commerce Fee or your state’s lawyer common in the event that they proceed to take action.

I’d solely talk with this firm if completely mandatory, although. You’re now not chargeable for this debt. Don’t let any debt collector let you know in any other case.

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Robin Hartill is a licensed monetary planner and a senior author at The Penny Hoarder. Ship your tough cash inquiries to AskPenny@thepennyhoarder.com.