OFFER OF NEW CREDIT CARD

Sometimes the collectors of old debt offer a new credit card if the consumer will transfer part or all of the old debt to the credit card; other times they simply request payment. These collectors of old debt often fail to inform the consumer that if he or she transfers part or all of the balance of the old debt to the new credit card, acknowledges the old debt, or makes payment toward the old debt, that debt is renewed and the owner of that debt may once again sue and use other legal remedies to collect the debt.

The collector of old debt may use this technique to trick the consumer into renewing the old debt. This may be an illegal collection practice in violation of the FDCPA.

Courts have held that a lawsuit filed to collect a time-barred debt violates the FDCPA. However, the collector in the above example does not sue, it merely sends a letter asking the consumer to transfer the balance of his or her old debt to a new credit card.

DECEPTIVE AND MISLEADING ASPECT

The deceptive and misleading aspect of this practice is the failure of the collector to inform the consumer that if he or she transfers part or all of the balance of the old debt to the new credit card, acknowledges the old debt, or makes payment toward the old debt, that debt is renewed and the consumer may once again be sued (and use other legal remedies employed) to collect that old debt.

REMEMBER….If you have an old debt which is time-barred and cannot be collected by lawsuits, wage garnishment, liens on real estate, etc., and you transfer the balance, acknowledge the old debt, or pay on the debt, it is renewed and can be collected by the above legal means.