Dear Credit Guy,

My brother, sister and I recently were left half of an estate. My aunt received the other half. Out of nowhere, old credit card debts from six years ago are claiming to have a right to take my inheritance. Can credit card companies take any of my money without my authorization or without talking to me? Also, do my brother and sister and I have to sell the property if we don't want to? Thank you. 

-Pete

Dear Pete,

It isn't clear from your question if the credit card debt mentioned is yours, but for purposes of my answer, I'm going to assume it is. The short answer is no,your creditors cannot take money from you or force you to sell your property.  However, your creditors can sue in court to collect the debt and if they win the case, the court can grant a judgment for the amount owed. With a judgment,the creditor can petition the court for wage garnishment or bank account levy orders or to place a lien on real property owned by you. However, to legally collect the debt, the statute of limitations (SOL) in the state where you reside must not have expired. To determine the statute for your state, read the CreditCards.com article "State statutes of limitation for credit card debt."The good news is that only a few states -- Montana, Wyoming, Iowa, West Virginia and Rhode Island -- have statutes longer than six years for  credit card debt.

After six years, it is much more likely that collection companies rather than your original credit card issuers are seeking to collect what you owe. Collection companies often attempt to locate persons whose debt they own by researching public records. The awarding of the estate to you, your siblings and your aunt would have been probated in a court and, therefore, the proceedings are public record. That could be the reason why "out of nowhere" you were contacted about the unpaid accounts. Keep in mind that although the debts may be past the statute of limitations,some collectors will attempt to sue anyway, and you must be present (or submit information to the court) to use the SOL as your defense.

So,unless the collector has already received a judgment, your inheritance should be safe. I recommend that you get free annual copies of your credit reports from the major credit bureaus at AnnualCreditReport.com and review what is going on with these credit card accounts. If a judgment has been issued for any of them, it will be listed in the public records section of the credit report. 

Depending on when the original accounts went delinquent (typically 180 days without payment), the credit card accounts and the collection accounts associated with them may be about to rotate off your credit report. Credit bureaus are supposed to remove them seven years from the date of first delinquency. But don't forget, even though you may be spared the pain of all that negative history on your credit, I would not bet on the collectors following suit. You may be harassed concerning these debts for many years to come. You do have rights under the Fair Debt Collection Practices Act to stop the harassment, however.

You might consider using some of your inheritance to pay what is owed. You could negotiate a settlement for each of the accounts. If you choose to do that, just know that you will restart the statute of limitations clock on that debt. Make sure you have the deal in writing before you pay and keep proof of payment just in case the debts come back to life in the future. That way, you will not have to worry about being hassled by collectors, and you will have paid at least an agreed portion of what is owed.

Take care of your credit!

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