Hi - my name is XXXXX XXXXX X'm a Bankruptcy litigation attorney here to assist you.
Under Idaho law, the statutes of limitations (contract is 5 years and judgment is 6 years) have expired or will expire sometime this year. Thus, the debt will not be collectible shortly. However, if you want to obtain a clear title to the vehicle, you're going to have to settle up with them.
Collection agencies are generally willing to take cents on the dollar in order to settle an account - especially an account that is no longer collectible because of the lapse of the statute of limitations.
IF you can offer a lump sum of to the creditor for around half of the amount due, you can probably get this resolved.
Thank you for that information. One quick follow-up: If I contact the collection agency about a settlement before the statute of limitations is expired, will it show up on my credit report and take another 7 years before it is taken off. Is that also a possibility if I pursue this after the SOL has expired?
Additionally, is repossession of the vehicle still possible after the SOL has expired?
If you just contact the collection agency, it will not cause any harm to your credit report. Your inquiry should also not re-start the 7 year credit reporting under the Fair Credit Reporting Act. However, if you were to resume paying the debt on an installment basis it would re-start the obligation and reinstate the statute of limitations. In that instance, it would remain on your report. However, if you settle on a lump sum, the credit report should show the account as closed or even not appear after the time period is up.
If the creditor doesn't have a right to collect the debt, its right to the collateral/vehicle should have also expired. However, if you don't pay them off in full and resume payments it will re-start the statute of limitations and it would give the lender the right to repossess if you were to default.
I apologize, but I am confused by the last paragraph of your answer. Can you clarify or re-state it?
Sorry if I was confusing.
I you contact the lender and agree to repay the debt after the statute of limitations has lapsed, it re-starts the statute of limitations and makes you liable again and subjects the vehicle to be seized/repossessed.
Thus, if you're not going to offer a lump sum payment in full, agreeing to repay the debt would revive the debt. However, if you pay the debt off in full, the matter will be over and there would be no reason to worry.
But, if you offer to make monthly payments or some other installment, the statutes of limitation are restarted and you could be sued or the car could be repossessed if you defaulted again.
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