what is statute of limitations?

[jspagnotta]

What is the name of your state? Colorado, I received a call yesterday that a collection agency is trying to collect on a credit card that i apperntly opened in 2000, The collection agency said that I contacted them in 2003 and offered them a settlement and the collection agency refused it because it was not enough money. The collection agency has waited this long to contact me and let the interest build up on this account an now wants me to come up with a large amount of money to pay it off, I am willing to pay a portion of it off, but I really don't even remeber having this credit card and if I did it only had a small balance when I canceled that card. My question is what is the satute of limitations on this and how can I negotiate a settlement? I asked they collection agency if I could negotiate a payment and they said I had to pay the entire balence with a interest rate of 19.9%. I really don't want them to garnish my wages or take me to court over this, I simply have no money to pay off a $6,000 debt in one lump sum, when the account had a credit limit of only $500.

[Debt Guy]

The numbers do not make sense. I can't see how a $500 balance could grow to over $6000 in only 6 years.

First, SOL in CO is 3 years. That begins to run from the date of your last payment plus 30 days. The date you opened the account is not relevant.

If your last payment was over 3 years ago, send the CA a letter and say "this debt is time-barred under CO statues". Then either offer them whatever you think is fair or tell them to go away and not contact you again ever. Send the letter certified mail return receipt requested. Keep copies of all correspondence in a safe place.

Even if the debt is OOS, you can still be sued. SOL is not a bar to suit but is only an affirmative defense. So, if you are sued, you must file a response with the court. If you don't you will lose automatically and they will be awarded a judgment. Then you will have real problems.

If your last payment was less than 3 years ago, reply back and we can talk about a different strategy.

[jspagnotta]

When I talked to the CA to find out more about this debt, they said that in 2003 I offerd them a settlement of $1500, according to thier records I told them I would have to make payments on the $1500 settlement, and they said they would not except payments, I would have to pay off the entire balance of $1500. I have not made any contact with them or payments of any kind to them since at least then, It was probably longer than that since a payment has been made since it was in collections.
What excactly do I need to do to get them off my back so they won't take my to court over t his?

[Debt Guy]

OK, the fact that you spoke with them a couple of years ago means nothing.

If the CA is saying you made a settlement offer in 2003, then almost surely you defaulted at least six months earlier than the settlement conversation.

For the purpose of this analysis, assume you spoke to them in December 2003. Six months earlier would be June 2003. This is September 2006. That means more than 3 years have passed since the SOL began to run. This debt is now out of statute for CO. I am 99% positive.

But, to be absolutely sure, you need to figure out when your last payment was. If you don't keep records (and you sound like a person who does not), you can contact the original creditor and ask the date of last payment.

Again, re-read my last post. It should answer all your questions. Llet me know what question you still have.

[jspagnotta]

First of all, thanks for all your help.
The CA contacted me again this past weekend and I asked when the last payment was made and they said it was in Dec. 2000, I then told the CA that the SOL was only three years and she told me that it was six years in Colorado on Credit Cards and that they were still within the SOL. She offered me a settlement that had to be paid by the end of this month. Is she just trying to scare me into paying this large amount? At this point do I need to send them a letter asking them not to contact me anymore due to the fact that the SOL has run out?

[Debt Guy]

Here is what I could find in the Colorado statues:

Colorado Revised Statute Title 12, Article 14, Section 101, et seq. (12-14-101)

INTEREST RATE
Legal: 8%
Judgment: 8% (or higher if specified in contract or note)

STATUTE OF LIMITATIONS (IN YEARS)
Open Acct.: 3
Written Contract: 6 (signed promissory note)
Written Contract Goods Services: 3
Domestic Judgment
District Court-20 (renewable every 20)
County Court-6 (renewable every 6)
Foreign Judgment: 6 in CO.

The question is whether or not a credit card is a written contract. Some say yes and some say no. Certainly there is no signed promissory note with a credit card.

I suggest you read the actual statute and see what you think it really says. If you think a credit card does not fit the definition of a written agreement -- and you can argue that -- then tell the CA to take a hike and wait to see if they sue you.

Whether or not the SOL has expired, you can be sued. SOL is not a bar to litigation but is only an affirmative defense.

Try a PM to Ladynred. She may have some specifics about CO.