From time to time, a Guest Blogger shares voice at the New Mexico Bankruptcy Law Blog. Today, we welcome Deborah M. DeMack.  Deborah is a former Assistant Attorney General in the Consumer Protection Division of the New Mexico Attorney General’s Office. A solo practitioner now in private practice in Santa Fe, NM, Ms. DeMack practices consumer law, debt collection defense, and consumer bankruptcy. She can be reached at 505.471.3302. Her website is:

This post covers the first 2 things to know; the remaining points will be in a post next Tuesday.




1.         How Old Is the Debt?  If the debt is old enough, it may be past the legal statute of limitations, meaning, the debt is legally unenforceable in a court of law.  But that won’t necessarily stop debt collectors from trying to collect on a debt, even if it is YEARS past the statute of limitations.

In New Mexico, the statute of limitations for open accounts and revolving lines of credit such as credit card accounts is four years.*  So if it’s been more than 4 years since you last paid on a credit card account, it’s possible that the debt is past the statute of limitations.  Therefore, legally speaking, the debt is unenforceable.

However, this does not mean that a debt collector won’t file a lawsuit in an attempt to collect on a debt.  If you are sued by a debt collector on a debt that is past the statute of limitations,  IT IS UP TO YOU to  raise this argument or any other legal defense(s) you may have.  Further, different statutes of limitations apply to different types of debt.  To be sure, check your state statutes.  Other regulations or statutes may apply with respect to attempts to collect on “stale” debt.

* Statutes of limitations differ depending on the type of debt, whether or not there is a written contract, and other factors.  Laws also differ state to state.

2.         Many Debt Collectors Are Not the Original Creditors.  “Original creditors” are banks or other financial institutions that originated the loan, i.e., lent you the money in the first place.  Once you stop paying on a debt, after 4-6 months of trying to collect from you on a debt owed, many banks and credit unions will give up, and charge off the debt as a “bad debt.”

However, this does NOT mean that the debt goes away.  Typically, after the original creditor charges off the account, it then sells the defaulted debt on the secondary market to third party debt buyers.  These debt buyers, commonly known as “junk debt buyers,” purchase bundles of hundreds, even thousands, of defaulted debts for pennies on the dollar — but they acquire rights from the original creditors to collect on the debts — including the right to sue the debtor!

There are tens of thousands of junk debt buyers out there, and many aggressively pursue consumers, trying to collect on the debts they purchased.  Most have names consumers have never heard of, such as NCO Financial Group, Portfolio Recovery Associates, LLC, CACH LLC, to name just a few.

Many of these debt buyers also buy  and resell bundles of defaulted consumer debt among themselves — even years after the original creditor charged off the account.  So your debt lives on!  That’s why consumer attorneys call this type of debt “Zombie Debt” — it (almost) never dies! And until you do something definitive to eliminate the debt, any legal owner of a defaulted consumer debt account can continue to collect on the account.


Links to earlier guest posts by Ms. DeMack are:

Debt Collection Abuse and the FDCPA

To Whom Does the FDCPA Apply

What Debts are Covered?

How May a Debt Collector Contact You?

What Acts or Practices are Prohibited by the FDCPA?

How Do You Stop a Debt Collector from Contacting You?

The 30 Day Validation (Verification) Notice

Statutes of Limitations

Other Types of Illegal Debt Collection Acts

What are Your Rights and Remedies under the FDCPA?

When Debt Collectors Call

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