If this alleged debt is a debt from your distance past, meaning that it is over seven years old, then you may not be legally bound to pay this debt. In most cases a letter claiming that a collector is about to pursue legal action and file suit against you, is a nothing more than last ditch effort to collect the debt.  This is a drastic final measure that many collection agencies take in order to close to a file.

Every state has a very specific statute of limitations concerning credit and judgment.  In the majority of cases, if a debt has been on your credit for over seven years then the collector is no longer legally able to collect the debt.   The statute of limitations begins on each of your specific debts on the final date on which the overdue account had activity.   There are generally two dates on your credit report for each item.  The date of last activity and the date that the item was reported.

If seven years have passed from the date of last activity to the date that they are attempting to collect the debt, then you are protected by the statute of limitations. (check out the Fair Debt Collection Act )

On the flip side it should be noted that creditors are not legally bound to report any overdue debt on your credit report the moment that the account becomes delinquent.  In most instances they are not required to report the debt until seven years from the date the account went inactive.

This is why you should take great care in searching over and investigating every item on your credit, to assure that it is a valid debt, and that it is not protected by the statute of limitations.

In order for a collector to actually pursue and file suit and for judgment to occur, it must also fall into this period of time.  You can’t be taken to court for an item on your credit if meets the statute of limitations.

However, many collectors or collection agencies will attempt to use these scare tactics in order to get the debt paid, even if it does fall under the statute of limitations.  If a collector can get you to agree to pay the debt or get you to enter a deal to pay off the debt then the statute of limitations will no longer be valid.

Each state has their own specific laws concerning the statute of limitations on judgment.   In order to gain full knowledge of your states views and up holdings on the statute of limitations you should familiarize yourself with your states individual laws.  You are protected not only by the statute of limitations debt laws at a state level, but also at a federal level.