Michigan has a statute of limitations on debt collection of six years (with certain, limited exceptions).
Say you have a balance on a credit card, fall on hard times, and six years goes by without a) you making a payment on the account, or b) the creditor filing a lawsuit against you. Under Michigan law, you now have a defense to any future debt collection lawsuits they might be thinking of filing! If you're sued, and you timely and appropriately assert that the statute of limitations has passed (the "this debt is time-barred" defense) in your answer, you just may win your case!
BUT THERE'S A CATCH ...
If the creditor can convince you to pay something - anything - on that old debt, the six-year period starts all over again! They know this, and they count on the fact that you probably don't. So, they try to trick you. All of the sudden they're nice to you. They play on your emotions. And, they pander to your sense of right and wrong.
THIS IS HOW THEY DO IT ...
Check out the notice one of our clients recently received in the mail, below. Did y u forg t somethi g? Cute, right?
This client lost her job in 2009, and has suffered from major medical issues since. Because she hasn't been able to, she hasn't made a payment on this debt since November 2009. She lost her house, and although things are starting to look up, she's struggled every day since then. Isn't it great that they agree that our client deserves a second chance? That might be one thing Savage Legal Group, PC and Midland Credit Management, Inc. agree on.
But as to this client, this debt is time-barred. MCM can't sue her, and they can no longer report this on her credit report. Note the "charge-off" date on page 2.
So, what happens if our unwitting client calls them up and accepts one of these "generous" options so that she can "put this debt burden behind her"? After all, she does want to regain her financial freedom!
We won't hold you in suspense. If our client pays these debt buyers anything in response to this "offer," she'll be back on the hook for the full $9068.58 balance! If she signs up for Option 2 or Option 3, and then misses a payment, they can and likely will sue her. And that doesn't sound much like "putting this debt burden behind her" or "regaining her financial freedom."
Unless your financial situation has dramatically improved AND your conscience is really bothering you (because you never paid Citibank), don't fall for this dirty, rotten debt-buyer trick! Put this "offer" in the circular file, where it belongs!
One final note: we added the highlighting to the CFPB-required notice. We are quite confident that MCM would never deliberately draw your attention to that language!