How long can a debt collector pursue an old business merchant account charge back?

[stig1957]

What is the name of your state (only U.S. law)? Michigan

I had a business with a merchant account back in 2010. I received several online orders for products for which I placed orders with a supplier. The supplier shut his doors and left me hanging for the charges from my customers without product to ship them.

I closed my business and merchant account and they sent the balance of about $11k in chargebacks to a collector. Though the business was closed, I had guaranteed the merchant account so the collector came after me personally. The debt collector agreed to a $150/mo payment from me at an unspecified interest rate. I never saw a written agreement from them. For the past 6 years I have been making payments. Each time I question the account, the agent threatens to file a report with the credit bureaus to damage my credit.

How long can this go on?

 

[LdiJ]

What is the name of your state (only U.S. law)? Michigan

I had a business with a merchant account back in 2010. I received several online orders for products for which I placed orders with a supplier. The supplier shut his doors and left me hanging for the charges from my customers without product to ship them.

I closed my business and merchant account and they sent the balance of about $11k in chargebacks to a collector. Though the business was closed, I had guaranteed the merchant account so the collector came after me personally. The debt collector agreed to a $150/mo payment from me at an unspecified interest rate. I never saw a written agreement from them. For the past 6 years I have been making payments. Each time I question the account, the agent threatens to file a report with the credit bureaus to damage my credit.

How long can this go on?

Have you asked for a balance due on the account? It would take just a bit over 73 months to pay off 11,000 without any interest being charged. At an 8% interest rate you would have had to pay 193.00 a month to pay it off in six years. At 8% and 150.00 a month it would take about 8.5 years. If the interest rate is higher than that, then it would take even longer.

The collector should be willing to give you a balance due amount and the applied interest rate.

 

[FlyingRon]

Statute of limitations on both contracts (written or oral) and collection of debts in your state is six years. Most likely that started to run when the chargebacks were posted. When you signed some further agreement with the collector, the SOL refreshes from the time you breach that (first payment due that you missed).

 

[stig1957]

Statute of limitations on both contracts (written or oral) and collection of debts in your state is six years. Most likely that started to run when the chargebacks were posted. When you signed some further agreement with the collector, the SOL refreshes from the time you breach that (first payment due that you missed).

I never signed an agreement with the debt collector, no agreement on interest, no nothing. I just setup an automatic payment each month which basically just kept him/them from attacking my credit. The original chargebacks date back to late 2010 so the six (6) limit is approaching. The business was closed in 2012.

So the question is, not having signed an agreement of any type, and no other collection action has been taken by this collector, what are my liabilities after 6 years?

 

[Zigner]

I never signed an agreement with the debt collector, no agreement on interest, no nothing. I just setup an automatic payment each month which basically just kept him/them from attacking my credit. The original chargebacks date back to late 2010 so the six (6) limit is approaching. The business was closed in 2012.

So the question is, not having signed an agreement of any type, and no other collection action has been taken by this collector, what are my liabilities after 6 years?

Because you're consistently paying on the account, the statute of limitations is still 6 years out. Focus on getting a statement/balance.

 

[FlyingRon]

You starting to make payments on the debt is acknowledging you owe them. As stated, it runs 6 years from the time you stop paying.

 

[stig1957]

Because you're consistently paying on the account, the statute of limitations is still 6 years out. Focus on getting a statement/balance.

So without any written agreement, how is interest determined? I've paid something like $10,800 on an $11,000 debt over the past 6 years. What is the maximum interest rate they can apply in the absence of any agreement?