Has the Limit Passed?

Brian bought a car and purchased wheels for it on credit. He didn't pay the bill, and now the collectors are trying to settle with him for what he owes. Should he pay the debt or not?

QUESTION: Brian in Los Angeles bought a car and purchased wheels for it on credit. He didn’t pay the bill, and now the collectors are trying to settle with him for what he owes. Brian thinks the statute of limitations should have expired. Should he pay the debt or not?

ANSWER: I always look at these things through two or three lenses. One is your credit, another is the legal aspect of it, and also what’s the right thing to do. The right thing to do is that you took these people’s wheels and you need to pay for them. That’s what I would do. You could probably scratch together $1,100 and offer that as a settlement because they’ve probably added legal and collection costs and interest for all these years and all that other stuff.

But you can probably settle the debt for somewhere around what you borrowed, maybe a little bit more. You will have done the right thing and gotten it off your credit report. It will now show up as a bad debt that has been settled.

Can they chase you under the statute of limitations? That’s a matter of state law, and since I’m not a California attorney, I’m not up to speed on what the statute of limitations is because I seldom use that to get somebody out of debt, so I don’t memorize them all.

I typically say that this is the real world and you have to deal with this, because even if there’s a statute of limitations, they are going to chase you to the end of the earth. They are going to drive you nuts. And for $1,100 you can get them out of your life and get it off your credit—–and by the way, it’s the right thing to do.