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Does it make sense to settle old credit card debt?

Miami, FL |

I have a charged off credit card debt of about $30K from about 3 years ago. Now a collection agency is agreeing to settle it for about $5K. Does this make sense for me, or will it hit the statute of limitations soon anyways?

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Attorney answers 4


With a debt that large I'm sure that the collection agency is only the first step for the creditor to collect upon this debt. If you do not settle this account to resolve this debt it may lead to more aggressive collections by way of a judgment, which then opens up the possibility of liens/garnishments.

I would resolve this debt now rather than chancing it and waiting to "see what happens" as that may lead to a bad result. I would make sure that any potential settlement you obtain is verified by written communication from the agency; it may also be in your interest to retain a debt settlement attorney to at least review any settlement letter to make sure that the agreed upon amount you pay will absolve you of any liability in the future and the debt is "settled in full."

I have seen lawsuits filed by creditors with only one month remaining under the statute of limitations. That being said, until the statute of limitations has expired I would be cognizant of the worst case scenario and protect yourself accordingly.

If this is not your only outstanding debt I would recommend consulting with a debt settlement attorney to explore the options available to you. I wish you the best of luck!


Attorney Kelbel is correct. Until the statute of limitations has passed, you have exposure for suit regarding the debt. That being said, if you are in a position to settle with the creditor, you should seriously consider it. However, seriously considering it means that you must consider any other debts that may come up from your past. Speak with a debt settlement attorney would be good road. Be sure that you pull a copy of your credit report to be sure of what your circumstances are.

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The SOL on contract debts in FL is 5 years from default. I doubt that the collection agency is being truthful with you. Once they get your 5K they will want more.

R. Jason de Groot, Esq., 386-337-8239


You need to be careful. The statute of limitations varies from state to state. Some states have shorter statutes of limitations. Your credit card may be governed by the law of a state other than Florida. If so, the debt collector or creditor may be trying to collect a time-barred debt. I refer to them as "Zombie debts." It would be best to look at the underlying agreement to make this determination. Once a determination is made that you could be sued for the debt, one should evaluate whether you are collectible, whether bankruptcy is an option, and whether the creditor has padded the debt with improper expenses or fees, etc. It might be a good idea to send the debt collector a validation request to request the underlying credit application and all contract documents, including any amendments so that you can best evaluate your options. I wish you the best in the future.

Disclaimer: The above is intended to give you, the consumer, some insight into various legal topics. This information is not intended as legal advice, but rather an attempt to provide helpful topical information. Please consult a lawyer as to the specific circumstances of your case. Again, this is not to be considered legal advice nor does an attorney-client relationship exist.