Think you know AARP? What you don't know about us may surprise you. Discover all the 'Real Possibilities'



Contests and

Dream Vacation Sweepstakes

10 weeks. 10 amazing trips. Seize your chance to win!
See official rules. 

Driver Safety

Piggy bank on the road - AARP Driver Safety

Take the new AARP Smart Driver Course!


AARP Foundation Tax-Aide

You can get free, face-to-face tax assistance nationwide.

Money Matters Tip Sheets

Download and print out these PDFs to help with your financial matters.

AARP Books

Visit the Money Section

Enjoy titles on retirement, Social Security, and becoming debt-free.


Learn From the Experts

Sign up now for an upcoming Money webinar or find materials from a past session. 

Jobs You Might Like

most popular


Dusting Off Old Debt

Federal, state laws limit collectors in chasing you over ancient debt

Dear Liz: A collection agency just called about a credit card debt I failed to pay — more than 20 years ago! The agency is offering a repayment plan. Should I take it?

You should always pay your debts, right? But in the case of a long-unpaid debt, doing the right thing ethically can cause problems legally. That's because every state has statutes of limitations on debt, typically from 3 to 10 years. These statutes limit how long a creditor or collection agency can sue to reclaim the money.

Collectors can buy "out of statute" debts for pennies on the dollar from credit card issuers, cellphone firms, and other companies, so anything they squeeze out of a borrower is almost pure profit. And they often won't tell you you're not legally obligated to pay. In many states, making a small payment on an old debt will restart the statute of limitations and allow a creditor to sue. That can lead to trashed credit and wage garnishment.

In a new twist, collection agencies partner with banks to offer credit cards to people with troubled credit histories. If you snap up the card, you might not realize you're also agreeing to pay the old debt, which has been added to the card's balance. In 2010 Monterey County Bank paid a $3 million settlement without admitting or denying wrongdoing after the FDIC accused it of helping a debt collector revive expired debts with deceptive card offers.

With the economy improving and borrowers looking for fresh starts, these collection efforts are on the rise. But don't take the bait: Tell the collection agency — in writing — to stop contacting you.

Topic Alerts

You can get weekly email alerts on the topics below. Just click “Follow.”

Manage Alerts


Please wait...

progress bar, please wait

Related Video

Janet Bodnar, deputy editor, Kiplinger's Personal Finance magazine, offers some tips for dealing with too much debt and how to dig out.

Tell Us WhatYou Think

Please leave your comment below.

your money

Discounts & Benefits