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If youre one of the many Americans who are lying low and waiting for old collections to fall off your credit report, you may be in for a nasty shock. Some unethical collection agencies tamper with the dates they report to the credit bureaus. By changing the dates associated with the account, the collection agency can ensure that a derogatory entry remains on your credit report for longer than the law allows. This process is known as "re-aging" and it is illegal.

How Debt Collectors Re-age Debts

You may end up waiting longer than 7 years...

Lets say your original debt was a defaulted credit card debt and you stopped making payments in January of 2005. In June of 2005 – 180 days later – the credit card company assigns your defaulted account to a collection agency and updates your credit report to lect that the debt you owe was charged off. When the collection agency gets the debt, it adds a new derogatory trade line to your credit report. Now you have both the original creditors derogatory entry and one from a collection agency.

The Fair Credit Reporting Act dictates that most debts can only remain on your credit report for 7 years and 180 days from the date of first delinquency. The date of first delinquency is the date that your payments to the original creditor were first classified as late.

What many debtors dont realize is that the DOFD applies to all entries for a given debt. Because few creditors send accounts to collection agencies until they are 180 days delinquent, collection agency entries rarely remain on debtors credit records for the full 7.5-year period. The absolute latest a collection account should disappear is at the same time as the original creditors charge-off. In other words, it simply isnt legal for a collection agency to leave derogatory information on your credit report for longer than the original creditor.



SOL and the Credit Reporting Period

Dont confuse the statute of limitations for lawsuits with the credit reporting periods statute of limitations. These are two totally different time frames. The statute of limitations for lawsuits ers to the amount of time a debt collector can legally sue you in your state. Each state has different statutes of limitations. The credit reporting period – 7.5 years – is federally mandated and the same in every state. Generally the statute of limitations for lawsuits expires long before the credit reporting period.

This is covered in more detail here: The Credit Reporting Period vs. the Statute of Limitations

Re-aged Collection Accounts

If you pull your credit report and the original creditors derogatory information is gone but a collection agencys negative trade line lingers on your report, theres a good change the collector re-aged your debt.

Re-aging sets back the clock on your debt.

When a debt collector re-ages accounts, it reports a date of first delinquency that is much later than the actual DOFD. In the above example, our DOFD was January of 2005. The collection agency gets the account in June of 2005. If the collection agency reports the date of first delinquency as the date it received the account – in June – the derogatory information will remain on your credit report until June of 2012, rather than being removed in January of 2012, as federal law dictates it should be.

Although clearly illegal, this nasty little trick is incredibly common. I see it literally All. The. Time. A collection agency that regularly alters the dates on its accounts could theoretically ensure that a collection account remains on your credit report indefinitely.

What To Do About Re-aged Collection Debts

Removing a re-aged collection account from your credit report is much easier if you have proof to back up your claim of re-aging. This is one reason I recommend that all individuals print out their credit reports from each credit bureau once each year. The dates lected in the original creditors trade line prove your claim of re-aging – but thats much harder to do once the original creditors trade line ages off your account. Most credit card companies dont keep charge-off records longer than 18 months, so getting proof from the original creditor after the fact is difficult, if not impossible.

If you have proof, send it to the credit bureau along with a letter explaining that the collection account is obsolete and should have been deleted, as the 7.5 year period for that particular debt has already passed. Make sure to use the word "obsolete" in your dispute. Disputes are coded and while I wont get into that right now, I will say that you want your dispute to have the "Obsolete" code.

You can also take your re-aging issue up with the collection agency itself. A well-written "I have every right to sue you" letter along with proof of the re-aging is often enough to coerce debt collectors to remove derogatory information from your credit report. Make sure you point out that you want the trade line deleted. Anything less is against federal law.

No matter how much debt collectors have hounded  you in the past or how many FDCPA violations they rack up, know that the corruption that runs rampant in the collection industry doesnt always run unchecked. This past April, the U.S. Third Circuit Court of Appeals ruled that a collection agencys company attorney can only send the debtor letters using the attorneys letterhead if the attorney is acting in a "legal capacity" rather than merely as a debt collector himself.

Sound confusing? Let me break it down further. First, lets take a look at the FDCPAs rules regarding what debt collectors can and cannot do when communicating with debtors. Heres a peek at Section 807


Collecting By Fear 

In a nutshell, this means that the collection agency can neither threaten to sue you outright nor imply that they may sue you if they either dont have the legal right to do so (such as after the statute of limitations passes) or if the company does not intend to take legal action.

While this seems like good old common sense, the reason these provisions are included in the FDCPA is to protect debtors from abusive debt collectors who use fear as a collection tool. A debtor who believes hell be facing a lawsuit if he doesnt pay is more likely to pony up the cash than someone who knows the collection agency doesnt have a leg to stand on. Collecting by fear is generally considered unethical. Thus, the FDCPA forbids this debt collection method unless the collection agency is willing to back itself up with an actual lawsuit.

Collection Agency Attorneys

Now, remember that talk we had about collection agency attorneys? If so, then youll recall that collection agencies that do not use in-house attorneys sometimes pay third-party attorneys to draft letters to debtors. These letters usually contain a small disclaimer somewhere noting that the attorney has not personally reviewed the debtors case. Collection letters on an attorneys letterhead are an effective collection tool because they essentially let the collector skirt the "implied" lawsuit ban put in place by the FDCPA. The debtor sees a letter from an attorney and automatically assumes he is in danger of a lawsuit, even if the letter does not say anything to that effect. As a rule, a debtor is more likely to pay off his debt after receiving a collection letter from an attorney rather than from a collection agency.

The unspoken threat that a collection letter from an attorney poses is clear: Pay the debt or well take you to court. After the April 2011 ruling in  Lesher v. The Law Offices of Mitchell N. Kay by the U.S. Third Circuit Court of Appeals, that loophole is no longer an option for collectors.

The Case

The situation behind  Lesher v. The Law Offices of Mitchell N. Kay is a common one. A collection agency enlisted a third-party attorney to collect an unpaid debt from the plaintiff, Mr. Lesher. The collection letters from the attorneys office arrived on the lawyers letterhead. Of the two letters Mr. Lesher recieved, neither posed an outright threat to sue. According to Lesher, however, that threat did not need to be made directly. The very fact that the collection letters arrived on company letterhead implied that the collection agency could and would sue him.

You dont want to end up here

Lesher filed a lawsuit based on violations of Section 807 of the FDCPA. The violation was a simple one: a letter from a collection attorney strongly implies that a lawsuit may follow in the event the debtor does not pay.  The collection attorney created this implied threat yet did not so much as review Mr. Lesters file. Although attorneys can act as debt collectors, many simply draft individual letters for collection agencies to add weight to payment demands.  Lester won his lawsuit and, by doing so, put case law on the books that goes a long way toward closing the loophole of collection attorney letters that collectors previously enjoyed.

The Pending Brief from NARCA

By establishing a precedent dictating how a collection agency can use a third-party attorneys services when collecting a debt, the U.S. Third District Court of Appeals sliced into the collection industrys profit pie with a wide blade. This prompted a quick response from the National Association of Retail Collection Attorneys, which filed an amicus brief with the court.

Im not sure if its funny, infuriating or just plain sad. The collection industry isnt immune to the economic problems that plague our country. Aside from a back-door judgment, using collection letters from attorneys was the collection industrys "ace in the hole."

I have no seen or reviewed NARCAs court brief, but Ive got a pretty good idea of what it says. Personally, Im not a big fan of amicus briefs but, in some cases, I can see the necessity of them. An amicus brief is merely a brief filed with the court by a third-party not directly involved in a lawsuit but who will be impacted by the outcome of the case. The amicus brief provides the court with additional information on the case, along with the potential consequences for those not directly involved and the third-partys legal opinions.

Right now everything is pending, so well just have to wait and see how the case turns out. All I can suggest is that you keep your fingers crossed that the court tosses NARCAs brief in the trash before moving on to more pressing business. The more protections debtors receive under the FDCPA, the less leeway debt collectors and collection attorneys alike will have when using scare tactics to elicit payment.

If you, like so many Americans, are fighting collection agencies and suffering from undue emotional and financial hardships as a result of collector harassment, take heart – you hold the cards. No, Im not trying to sell you anything. What I want to do is give you the information you need to fight the good fight and demonstrate to the debt collectors hot on your tail that they need to find easier prey.

As a professional, its incredibly disheartening to stumble upon websites that claim to offer valuable advice on how to fight collection agency debt yet instead instruct readers to do things that will either make the situation worse or get them sued. Granted, risks are an inherent part of this industry, and some methods are riskier than others, but consumers deserve to know just what theyre up against with certain debt avoidance tactics.

Before we Begin: The Disclaimer

I am not an attorney. I am a consumer advocate and a credit specialist. The information I provide is not to be considered legal advice nor do you and I share any variety of attorney-client privilege . My posts are a compilations of years of experience and a nose-to-the-grindstone study of the law. Anything you choose to do, you must do at your own risk (but I promise to explain those risks to the very best of my ability).

What Is Collection Agency Debt?

Collection agency debt is any financial obligation owned by a collection agency. Dont get these companies confused with collection departments. They are very different beasts. I will explain the difference in a later post. As a general rule, if youre getting telephone calls and letters concerning a debt you havent paid in over six months, youre dealing with a collection agency.

Collection agencies buy debts from hospitals, credit card companies, utility companies, mortgage companies and rent-to-own facilities for much less than the debtor actually owes...much, much, much less. The company then adds some outrageous fees and goes after the debtor for the balance. The majority of these agencies will continue to add "late fees" (yes, Im laughing) and interest to your debt so that they can eventually offer you a settlement and make it appear to be a good deal. Thus, your unpaid debt increases for a while before sharply declining.




While all this is going on behind the scenes, youre getting inundated with phone calls and letters from debt collectors trying to extract even the smallest payment from you. Paying even a penny, however, is usually one of the worst mistakes you can make when fighting collection agency debt. Dont do it!

Fight The Debt Collectors 


Luckily, you have a plethora of consumer protection laws backing you up. No matter how you may have criticized your government in the past (and lets face it, we all have) theyve done some real stand-up stuff for you in this area. Your job now is to take advantage of the numerous protections that are in place (and yes, a few of the loopholes) in order to escape the situation youre currently in without having to work yet another debt payment into your already strained financial budget. Im going to show you how to do that.

Not only do I hope to teach you the skills you need to start fighting collection agency debt and breathe easy once again, I hope that youll take this information with you and inform others so that they too can remove the noose and get their lives back.

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If youre one of the many lucky Americans who receive a tax refund at the end of the year, the last thing you want to have to worry about is having your refund snatched away from you by bill collectors. Unfortunately, if you owe debt to a collection agency and the collection agency has a judgment against you, losing your tax refund is a very real possibility. If you know your tax refund is at risk of being seized, there are steps you can take to protect your money and prevent collectors from garnishing your federal and state tax refund money.


Collection agencies love garnishment because it provides them with a way to recover unpaid debts without having to rely on the debtor to send in a payment each month. Garnishment ensures that payments arrive on time each and every month until the debt is paid in full.

Certain types of income, such as disability, unemployment, child support, etc. are all exempt for collection purposes. Collection agencies can neither garnish these or levy them directly from your bank account. Your tax refund is a special case, however. While debt collectors cannot garnish your tax refund from the IRS before its sent your way, once you deposit it into your bank account it becomes fair game for judgment creditors to seize.


I cant bring up tax refunds and claim that creditors cannot garnish them when there is one glaring exception to this rule – the government. If you owe back taxes or unpaid student loans, rest assured your tax refund will either be garnished or withheld in its entirety.

You see, its entirely too much trouble for the IRS to work with commercial creditors in order to facilitate garnishment of tax refund money. Your right to your full tax refund, even if a creditor holds a judgment against you, isnt a way for the government to ensure that you have the money you need. Its merely inconvenient for the IRS to permit creditors to garnish tax refunds before they are sent out.

How do I know this? All other forms of income that are exempt from garnishment are exempt due to a special status as a "benefit" (usually, but not always, a federal one). These benefits are exempt from both types of garnishment. Your tax refund is not a benefit of any sort. Its your money. It was always your money. You just used it to pay your taxes. Its no more exempt from seizure than money you receive when you return an item to a department store.


Because debt collectors cannot garnish your tax refund directly from the IRS, you should receive your full refund. Provided you cash your refund rather than depositing it into your bank account, debt collectors – even those with a judgment against you – will not be able to touch it.

Get your tax refund on a pre-paid Visa card.

One thing to remember: If you are e-filing, request that the IRS mail you your refund via a check or prepaid Visa card (yes, they do that. Cool, huh?) rather than using direct deposit to deposit the money into your checking or savings account. While direct deposit is much faster than getting your refund through the mail, its also much safer and less stressful than waiting with baited breath for your refund to clear before racing to the bank to withdraw it before the collection agency can freeze your bank account.


Related Posts:

Funds Exempt From Bank Account Garnishment

Make Yourself Judgment Proof

Checking Account Garnishment

I Filed Bankruptcy But the Collection Agency Keeps Calling!

When you file for Chapter 7 or Chapter 13 bankruptcy, an automatic stay goes into effect protecting you from collection activity or legal action from any of your creditors. Most creditors respect the automatic stay and step back to let the bankruptcy court work its magic. Collection agencies, however, often overlook your rights and will continue calling you and sending you collection letters even after you file for bankruptcy.

Note: For those who have filed a previous bankruptcy case in the past year that was dismissed by the court, the automatic stay is limited and sometimes nonexistent, depending on how many times you filed previously in the last 12 months. 

Violating the automatic stay in bankruptcy is illegal and if anybody knows illegal – its the debt collectors. Theyre all about illegal activity.

Does the Collection Agency Know you Filed Bankruptcy?

In some cases, collection agencies continue calling because they simply arent aware that you filed bankruptcy. Your attorney notifies your creditors, but sometimes attorneys send notices to the original creditor rather than the collection agency that bought your debt. The original creditor isnt under any obligation to inform the debt collector that an automatic stay is in place and it can no longer call you or send you letters. Thus, the illegal communication efforts continue.

Inform Debt Collectors About Your Pending Bankruptcy 

If a collection agency is violating the automatic stay, stopping the behavior is usually as simple as answering the telephone when the collection agency calls, informing the debt collector on the other end that youve filed for bankruptcy and giving the debt collector your bankruptcy case number.

Unfortunately, as weve discussed so many times before, debt collectors have high turnover and, because of this, receive little training so as to ensure that they work as many days as possible before the company must hire yet another bill collector to take the old ones place when he burns out. If the debt collector isnt aware of the seriousness of the automatic stay, he may simply hang up the phone and move on to the next call – leaving your number in the automated dialer.

Be patient. Spend an entire day if you must just answering the telephone and calmly giving each bill collector your bankruptcy case number. Its unlikely youll have to dole out this information more than once or twice before the company gets the message and the collection calls stop.

Notify Collection Agency of the Automatic Stay in Writing

If your efforts to notify debt collectors of your pending bankruptcy case over the phone prove futile, put the notification in writing. Send a letter to the collection agency via certified mail, return receipt requested, informing it that you have a bankruptcy case pending and contacting you or otherwise pursuing collection activity during this time is a violation of the automatic stay and ILLEGAL. Once again, include your bankruptcy case number so that the company can verify your claims if it wishes. If you have an attorney who doesnt charge extra for this service (he shouldnt, since it was his responsibility to notify creditors of your bankruptcy in the first place) ask him to draft the letter for you. Collection agencies almost always take letters from attorneys more seriously than those of consumers – even if the letters content is the same.

Put it in writing

Debt collectors are infamous for their sneaky and sometimes downright unethical collection tactics. One trick lurking up the sleeves of every major collection agency is a sense of urgency.

Look at your most recent collection letter. Odds are youll see phrases such as "This offer expires in 10 days!" "Important! Call today!" "this issue must be settled immediately lest we seek further action." and other such drivel indicating that if you dont get off your tush and pay up this very instant horrible things will happen.



The sense of urgency debt collectors create serves as a psychological tool. Urgency creates anxiety and instills a sense of fear in consumers that if they dont follow the instructions theyre given, they will somehow suffer. The truth of the matter is that collection agencies have very little power to force you to pay. If your income comes from exempt sources, such as Social Security and you dont own property, youre judgment proof and safe from a debt collection lawsuit. And the "time limits" that collectors impose mean absolutely nothing.

For example, if you receive a collection notice giving you 10 days to pay the collection agencys settlement offer and you agree to the offer on the 11th day, what do you think will happen? They may try a song and dance to get you to pay the full amount, but once a collection agency makes a settlement offer, that offer is always on the table. The same can be said of the "pay within 15 days or risk further action" letters. What is the "further action"? Usually nothing.

The next time you get a collection notice in the mail that gives you a limited amount of time to arrange payments, dont let the sense of urgency the letter creates cripple you with fear and anxiety. Remember, unless the collection agency sues you, they get nothing if you dont pay it voluntarily. You hold the upper hand.

Stop a Debt Collection Lawsuit 

If you know what youre doing, you can successfully halt a debt collection lawsuit in its tracks using the following methods:

The Statute of Limitations Defense

Each state has a statute of limitations for debt collection lawsuits. The time frame varies and can range from around 4 years in most states to 15 years if you happen to be unlucky enough to be living in Rhode Island. Once the statute of limitations expires, your debt is time-barred.

That doesnt mean that debt collectors wont try to sue you. Not responding to a lawsuit nets you a default judgment which is enforceable regardless of whether or not the debt was time-barred at the time the default judgment was levied. In order to fix it, youd have to return to court and contest the judgment. Its time-consuming and, if you hire an attorney, expensive.

If you receive a summons for a debt collection lawsuit and you know for a fact that the debt the company is trying to sue you for is outside your states SOL, fire back with a letter informing the collection agency that the debt is time-barred in your state and you would be more than happy to appear in court and inform the judge of that fact. Knowing that it cannot win, the collection agency will usually drop the lawsuit.

Like Ive recommended before, its a wise idea, in situations such as these to shell out a few bucks to have an attorney draft your letter. Collection agencies are always more likely to back off and drop a debt collection lawsuit when they know you have access to an attorney.

A letter from a bill collector isnt something you ever want to see nestled between your phone bill and the pizza coupons when you check the mail – but if the collection letter has your address and someone elses name, you can breathe a temporary sigh of relief.

Not worrying about being hounded by bill collectors is one thing, dealing with the repetitive "junk mail" theyre sending to someone else who they apparently think lives in your home is quite another.

Of course, when you receive something that looks like a collection letter, you open it – especially if its not addressed to you. Youre curious. Its okay, we all are. Youve probably heard over and over again that opening someone elses mail is a violation of federal law, and it probably is. But if I know one thing about the law its that there are all these pesky little contingencies involved. Joe Schmo often goes and reads federal statutes, interprets them to the best of his ability (i.e. incorrectly) and then spreads drivel all over forums he frequents. This drivel then trickles down to 1000 other places until the original law is all but ignored in favor of Joe Shhmos interpretation. You get me?

I have yet to come upon a case in which someone has been jailed for opening a letter with their address on it that just happened to be addressed to another person. Just sayin.

Someone Elses Collection Letters

So youve got these collection letters that just keep coming. Why should you do anything other than read them, chuckle to yourself at someone elses misfortune and toss them in trash? Two reasons:

1. The person the collection letters are addressed to, lets call him John Doe, may have no clue that bill collectors are even after him. Eventually the collection agency may just decide to sue him and guess whose house the summons will arrive at? Ignoring the summons on top of all the collection letters will leave John Doe with a default judgment he isnt even aware of. If you have no moral compunctions about putting another person in that position when you can prevent it, fine, but Jiminy Cricket frowns on things like that.


2. John Doe may have just given his creditor a fake address – your address – before stiffing them for the bill. That should anger you just a little bit. Here you are receiving collection letters because some jerk used your address as the basis for his scam. The least you can do is notify the collectors so that they can start looking in the right place and hopefully catch him. 


The big question, of course, is how to notify the collection agency that theyve got the wrong guy without admitting that you broke the law and opened someone elses mail.

Part of the difficulty in notifying a collection agency that theyre sending dunning letters to the wrong address stems from the fact that the Fair Debt Collection Practices Act prohibits collectors from putting any information on the exterior of an envelope that would indicate that the communication is from a debt collector. Most bill collectors avoid this by simply putting the return address on the envelope rather than the company name. If youve ever dealt with collectors before, however, you know that simply marking the letter "Return to Sender" isnt going to result in the company calling off the dogs. If bill collectors keep sending collection letters to your address but those letters arent for you, here are some options to consider:

Acknowledging That You Opened Someone Elses Collection Letter 

This is pretty innocent. As a matter of fact, Ive done this one myself. Call the collection agency and explain that while you were opening your mail you discovered the collection notice. Only after reading it did you realize that it wasnt addressed to you. Its an innocent error. Who really expects the mail in their mailbox to be for a stranger? In my case, the collection agent was surprisingly nice and helpful (My jaw hit the floor. I called geared for battle. Oh well, another time) but you cant always expect that.

Just admit you opened it.

You have a decent chance of getting the agent to begrudgingly accept the fact that the company made an error and take your address off the company mailing list. If the bill collector starts railing about you breaking the law by opening someone elses mail, take it calmly and point out that it isnt reasonable to expect that mail in your mailbox, with your address on it, isnt addressed to you. If you want to really make sure that you dont get any more mail from the collection agency, go to your good friend Google and track down the perpetrator for them. Have John Does real address on hand when you call.

Playing It Safe With the Collection Agency

If you like to play by the rules and dont want to risk a jilted collection agency doing something crazy – like filing a lawsuit against you for opening someone elses mail (because, lets face it, they are all about the Benjamins) you can opt to type out a nice letter noting that the recipient of this "piece of mail" is not a resident of the given address. Include an unopened collection letter (if you open it youre just giving yourself away) with your note and send both to the return address the collection agency provided on the letter.

Now – and dont screw this up – if youre playing it safe do NOT address the collection agency by name in your letter. The collection agency didnt list its company name on the envelope, and youre playing by the rules and feigning ignorance, remember?

With any luck, one of the above tactics will prove successful and you wont receive any more collection letters at your address for a mysterious debtor who doesnt live there.

How Collection Agency Debt Can Turn Into a Default Judgment

Collection agency debt, if ignored for long enough, can become a default judgment that haunts your credit report for far longer than a mere collection account. While this doesnt mean you should necessarily make arrangements to pay the collection agency (since that can rest the debt collection statute of limitations and be dangerous) you should be aware of how default judgments occur so that you can successfully avoid one.

What Is a Default Judgment?

A default judgment occurs when a debt collector files a lawsuit against you for refusing to pay the debt it claims that you owe. When it files a lawsuit, it is legally required to serve you with a court summons notifying you of the impending lawsuit so that you can appear and defend yourself. If you dont appear at the hearing, the judge will enter a judgment in favor of the collection agency by default. This is known as a "default judgment."

If you dont defend yourself, the judge will rule against you.