Re-aging debt is when you restart the clock on the statute of limitations on old debt. This usually happens when the debtor does something to restart the clock, such as make a payment on the old debt or even acknowledge the old debt with a creditor.
If you think you might have started the clock again on old debt, you might have re-aging debt to deal with. Find out what that means and what to do if it happens to you.
Definition and Examples of Re-Aging Debt
Re-aging debt is when you restart the clock on the statute of limitations on old debt. Statute of limitations is the period of time a debt collector has to file a lawsuit to collect a debt. Most statute of limitations fall somewhere between three and six years—sometimes up to 10 years—depending on the type of debt and where you live.
Typically, the statute of limitations usually begins the moment you miss a payment on a debt. And if you make a partial payment, even in collections, the statute of limitations restarts.
Even when the statute of limitations has passed, the collector can still contact you about an old debt; they just can’t sue you for it.
For example, in Delaware, an old medical bill you failed to repay has a statute of limitation of three years. Often, a creditor may try to contact you toward the end of the statute of limitations about the old debt. If you acknowledge the debt is yours, the re-aging process could start. In this case, rather than be near the end of the three-year statute of limitation, you’ve restarted the clock on the old debt, back to day one.
- Alternate name: Account re-aging
How Re-Aging Debt Works
Re-aging debt happens when someone with outstanding debt restarts the statute of limitations clock on an old debt. Since creditors can continue to contact you long after the statute of limitations has closed, re-aging debt can start at any point.
Say you stopped paying your student loans 15 years ago. If you live in Michigan, where the statute of limitations is six years, you probably wouldn’t worry about debt collectors coming after you for really old debt. But just saying that old debt is yours will start the re-aging process. When the clock restarts, it gives creditors the opportunity not only to contact you more for that debt, but to file a lawsuit to collect your old debt.
If a creditor contacts you to discuss old debt, be wary of acknowledging it. Even just confirming a debt is active may force you to pay the debt in full or reach a settlement. Always ensure a debt is valid before discussing it with a creditor.
Re-aging is also a term for an illegal practice where debt collectors inaccurately change the date of first delinquency on a consumer’s account to a later date. This could cause the delinquency to stay on your credit report longer than the average seven-year standard. The Fair Debt Collection Practices Act (FDCPA) protects borrowers from this treatment.
Can You Stop Debt Collection Agencies?
If you unintentionally did re-age the debt and you’ve started the statute of limitations again, it’s hard to stop it. That said, if debt collectors are reaching out about a very old debt, you have a few steps to take without owning it and starting the re-aging debt process.
- Ask about the debt. Without acknowledging it’s yours, ask specific questions about the debt. For instance: How much was the original amount? Who was the original creditor? When was the debt incurred?
- Ask about the company. Find out more about the company contacting you to make sure it’s legitimate. Get the company name, address, phone number, website, and anything else you think is necessary. Note the day and time you spoke with someone, and get the name of the person you spoke with. Keep this for your records.
- Ask for a letter in writing. If a company contacts you over the phone, ask for an official validation letter in writing that details this information.
You can use sample letters from the Consumer Financial Protection Bureau (CFPB) to respond to collection agencies about the old debt, depending on your circumstances.
It’s vital you never give personal or financial information to debt collectors over the phone. Verify a company is a legitimate agency before making any payments; otherwise, you could get scammed
If you’ve already started re-aging debt, ask the debt collection agency or creditor to work out a payment plan with you. See if you can stop them reporting the delinquent account on your credit report so your credit score will go up.
- Re-aging debt restarts the clock on the statute of limitations on debt, the length of which depends on the type of debt and where you live.
- You can start the re-aging process by simply acknowledging an old debt is yours.
- Once the re-aging begins, a creditor or debt collection agency can file a lawsuit in an attempt to collect an old debt.