Hi Can Someone Explain The Statute Of Limitations On Collections?
Posted on June 22, 2009 at 11:47 pm
Limitations on collections, I understand a little, but statute of limitations...what does it mean exactly?
Posted on June 23, 2009 at 2:11 am
Hi, it is the legal TIME LIMIT that the debt collectors are given to pursue the debt or the consumer. It differs from state to state and it depends on the type of debt. The statute of limitations (SoL) do not apply on certain debts, like:
-Federal student loans
-Child support
-Most fines
-Taxes (but many income taxes have a 10-year SoL, do consult with a tax expert with regards to your situation)
Posted on June 23, 2009 at 2:52 am
The statute of limitations, if it has expired on your debt, means that you do not have to pay for it anymore. It also means that the debt collectors can't file a law suit against you to collect on that same debt. The SoL on a debt usually expires after six years- from your credit report's last activity-although some states allow collectors anywhere from 2 to 15 years to pursue delinquent debts.
Posted on June 23, 2009 at 3:01 am
It has been after six years for me, how come I'm getting calls regarding that debt???
Posted on June 23, 2009 at 3:23 am
Check your state's SoL, and don't be surprised if the collection agency threatens to sue you, and remember to not admit to the debt or promise to pay it--as any of those might reset the SoL clock. The collection agency has a responsibility to send you a letter within 5 days after the first call, and it should state there that you can request for the debt to be verified, the amount of debt, and the contact info of your creditors.
Posted on June 23, 2009 at 3:30 am
Hey if you are not sure what the exact date (last activity) of your delinquent account is, you can request or order a free copy of your credit report from the credit reporting bureaus.
Posted on June 23, 2009 at 3:43 am
Speaking of credit reports, the credit credit bureaus can only report most types of debt to either 7 or 10 years. Some debt types such as tax liens remain longer than 7 years even after it has been paid. It can even stay indefinitely if not paid. It's important to know what your state's SoL is because some collection agencies will still try to collect from you because you still have that debt listed on your report--if for example, your state's SoL for collecting debt is only for four years, you have a right to refuse to pay that debt.
Posted on June 23, 2009 at 3:48 am
are those collection calls or me paying the debt (if ever) going to reset the credit report time clock? also, is it possible for them to sue me without me knowing about it?
Posted on June 23, 2009 at 3:58 am
No Andy,Andy the collection calls and you paying that debt would not reset the clock on that debt in your credit report, except if that is a tax debt...
Also, if they are going to sue you , you would receive a notice. The question is, what happens if you fail to respond to it properly. For example, you have no means of paying that debt off, so you just ignored the lawsuit, what may happen next is the court to granting the collectors what they call a "default judgment"
So even if you think that you can't afford to pay your debt off--do not ignore the lawsuit, but instead find out if you are "judgment proof"
Posted on June 23, 2009 at 4:12 am
you would need a lawyer to defend you in court or to explain these matters to you.
but here's what I know, you may be considered judgment proof if you've had periods of unemployment, and if you have claimed disability pay or disability retired pay or if you can prove that you really have no money or assets/properties like a home or a car, land, and other big-ticket items to pay for the debt.
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