Q: I received a call from a mediator office for Citibank stating that I owe from a balance from over 6 years ago.
I originally paid a settlement amount of $600 via money order and now the mediator said they may pursue me in court. How can I avoid this from happening?
A:
Two issues:
(1) Can you prove you paid $600 in full and final settlement of the claim? If so, how? You had better have this settlement in writing. If all you did was unilaterally pay $600 and write "in full and final settlement" on the payment, without express agreement of Citibank, then that is insufficient to impose a settlement.
(2) What is the statute of limitations applicable to Citibank's claim? That depends on what state law applies, and whether you signed "under seal" or not. If you entered into this debt in Maryland, or as a resident of Maryland, the general SOL is 3 years from the date the debt became due or you defaulted, or the last date you made payment on the debt, whichever is later. That means, if your $600 payment was not actually a settlement in full, then the SOL runs from the date you paid it. If you signed the contract or promissory note under "seal" (the word, "seal" appears on your signature line), then the SOL is extended to 12 years. This is not likely for a credit card debt, but is common for loans with promissory notes (auto financing, mortgages, student loans, etc.).
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