• The creditor may try to pick a better venue. If you sign a credit contract and move to a state with different limits, the creditor may try to sue you in the state that has the longer statute. If that's not the state in which you now live, you should protest, because generally the state where you reside is the one whose statutes should apply
  • Debts can still exist even if the creditor can't sue. Some people erroneously believe that debts are erased after the statute of limitations has run out. Although the creditor's ability to sue you has been curtailed, it can still try other methods to persuade you to pay, including calls and letters. The debt can also be sold to another collector that can renew efforts to get you to pay. A legitimate debt is truly gone only when it's paid or erased in bankruptcy court.
  • Collectors can't legally restart the seven-year clock by "re-aging" the debt (giving it a new delinquency date) orby selling it to another agency. The Federal Trade Commission shut down one large collection agency, Capital Acquisitions and Management, after charging the company repeatedly had re-aged debts in its attempts to collect.

Watch your step

If you can't pay a debt, you'll want to avoid saying anything that could restart the statute of limitations, including acknowledging the bill is yours or promising to make payments.

If you're sure the debt is too old for a lawsuit, you could send the collector a letter via certified mail, return receipt requested. The letter should state that the statute of limitations has expired and that you want all collection efforts stopped.

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Still have questions? Check out the advice on Debt Collection Answers, a website of consumer advocate Gerri Detweiler, and the guide "Solve Your Money Troubles: Debt, Credit & Bankruptcy" by Robin Leonard and Margaret Reiter.

If a debt collector is particularly abusive or you get sued, you may want a lawyer's help. The National Association of Consumer Advocates can provide referrals to attorneys familiar with fair credit laws.

Liz Weston is the Web's most-read personal-finance writer. She is the author of several books, most recently "The 10 Commandments of Money: Survive and Thrive in the New Economy" (find it on Bing). Weston's award-winning columns appear every Monday and Thursday, exclusively on MSN Money. Join the conversation and send in your financial questions on Liz Weston's Facebook fan page.