Q: 6yr old debt $300, today a collection agency is trying to sue me for $5000. Adding investigation fees? Is this Legal?
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- California
- (916) 704-3009
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- Answered
A:
Debt collection practices are regulated by both state and federal laws. For a debt that is six years old, it is important to first determine if the statute of limitations has expired. In California, the statute of limitations for most consumer debts is four years from the date of the last payment or the date the debt became due. If the statute of limitations has expired, a collection agency may not legally sue you to collect the debt.
Furthermore, collection agencies are not allowed to add arbitrary fees to your debt. They can only add fees if they are expressly authorized by the original contract or by law. Investigative fees or other charges that were not part of the original agreement are typically not permissible. Charging you $5000 for a $300 debt seems highly questionable and likely unlawful.
If a collection agency is attempting to sue you for such an inflated amount, you should respond to the lawsuit and raise these issues in your defense. It is also advisable to file a complaint with the Consumer Financial Protection Bureau (CFPB) and the California Department of Consumer Affairs. Seeking advice from a legal professional can help you understand your rights and the best course of action to take.
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