Bill collectors required to issue new notices

Many states, such as New Mexico and New York, have made it mandatory for credit card debt collectors to inform consumers they cannot be sued for debt they have not paid back, according to The Wall Street Journal.

New Mexico's law will start in March. It will require bill collectors to tell consumers that their loan has gone over the statute of limitations, which is four years for most credit card debt, the news source said.

This time period may differ from those compelled by other states.

Although this new regulation is supposed to help consumers, debt agencies say borrowers will think they never have to repay the debt. However, the unpaid debt could damage their credit report and in most cases remain there for seven years.

Having debt or any other kind of blemish on your credit report can lower your credit score. With a low credit score, you may have trouble obtaining a loan, refinancing a mortgage and getting approved for other types of credit.

However, consumers have a right to investigate or dispute any claim that damages their credit report. Many consumers have worked with credit repair attorneys to help them with their dispute process, as these professionals can often convince the credit bureaus to remove questionable negative items from individuals' credit reports.