Definitions

• The term bill collector can refer to the original creditor, an in-house debt collector, a third-party debt collector or a debt buyer. No matter which bill collector owns the account, it has the right to attempt collection even if the debt is 20 years old. Debt buyers and third-party debt collectors are subject to the contact restrictions outlined in the Fair Debt Collection Practices Act. All types of bill collectors are subject to the reporting restrictions outlined in the Fair Credit Reporting Act.
  
  

Account Collection

• A bill collector may attempt to collect a debt if it is 20 years old, but state statute of limitation laws relating to civil litigation place restrictions on the legal methods used in a collection attempt. Consumers who are aware of their state's statute of limitations regarding debt collection can use the statutes to defend against a bill collector's lawsuit. If the bill collector is attempting to collect on an account that is out of statute without benefit of a lawsuit, the consumer can inform the collector he is aware that the debt is out of statute.
  
  

Statute of Limitations

• State statutes of limitations for bill collection vary based on the type of collection account. The four main categories include open contracts, written agreements, promissory notes and oral agreements. Credit cards fall under the open contract category. Each state defines the length of time during which a bill collector can legally file a lawsuit in a collection attempt. The majority of states have statutes of limitations ranging from three to six years for all types of accounts. If a debt is out of statute, the bill collector may file a lawsuit, but the collector will lose if the debtor presents a defense based on the statutes of limitation.
  
  

Litigation

• Bill collectors who file a lawsuit and win a judgment can legally collect on the debt for the life of the judgment. A judgment's life span varies by state; some can range up to 20 years. Some states allow judgments to be renewed one or more times, which can increase their lifespan for more than 20 years. If a bill collector wins a judgment against a debtor, it can force payment through wage garnishment, property seizures, bank levies and liens.