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Debt collection statute of limitationsDebt is the amount that you have taken in the form of loans, credit card payments, pending bills to be paid, tax payments etc. When you are supposed to pay off these credits and are unable to do so they accumulate . These accumulated payments result in debts and can result in serious worries.
Most of the times creditors hire debt collection agencies so that they can get back their money from the debtors. But these debts can be collected only for a specific period of time. If your debt has crossed the statute of limitation then if the creditor troubles you, you can take action against them .
Most of the people get confused with as to what is statute of limitation for debt collection. Let us understand what exactly is a statute of limitation for debt collection . What is debt collection statute of limitation Every debt has a statue of limitation on it, which means that every debt has a time limit within which the creditor can take legal action against the debtor to pay off the debt . It is not that after this period the creditor cannot act but if a case is filed then the debtor on the basis of the statue of limitation can get the case dismissed .
The statute of limitation can keep the debtor away from the pushy debt collectors. It can also protect the rights of the debtor in getting relief from lawsuits filed beyond the statute of limitation . However, this statute of limitation varies from one state to another and also is different for different types of debts .
The debt collection statute of limitation is applicable for all types of debts like promissory notes, oral agreements, written contacts, open and revolving credits, car payments and loan and mortgages .
The statue of limitation is ruled by the different states. The debt collection statute of limitation for a particular debt starts from the day the debt becomes delinquent . This means that the first payment that you would have offended on starts the statute of limitation for that particular debt . In case of a revolving credit it starts from the last account transaction .
In case a lawsuit is filed it is important for the debtor to have the exact date when the account became delinquent . If you have your correct credit report then it can be enough evidence to prove the delinquency of your debts . How to take advantage of statute of limitation With the help of the statute of limitation the debtor can be aware of the burden of debt that he or she has. The statue of limitation can be beneficial only in case of a lawsuit. Though the debt would still be visible on the credit report but the debtor can bring down the instability with the help of the Fair Debt Collection Practice Act .
The statue of limitation starts from the last day the account was active. This can be different from the date that the account went past due. The credit report would show you a clear mention of the last date the account was active.
It is seen that at times even when the debt collection statue of limitation has passed the debt collectors try to collect the debts . They do so based on the fact that the debtor would not be aware of the statute of limitation .However, if you are aware that the statue of limitation for that particular debt has passed then you can make the use of this to defend yourself not to pay the debt .
Keep in mind that if you show activity in an account the statute of limitation starts all over again and you would have to pay these debts . Making payment or just promising or signing an agreement or saying that you intend to pay off the debt can start off a new statute of limitation on that account . What is your statute of limitation The statute of limitation for debt collection usually varies from 3-6 years on all debts. However, it is better that you take the help of an attorney to know what is the statue of limitation for your debt in your state .
Debt collectors are very smart. If you have relocated to a different state then they can use the statute of limitation applicable in the state where you took the debt to make collections . Here the debt collector can be at an advantage if the time limit is longer in the previous state as compared to the state where you are presently residing. When the statute of limitation cannot be of help It should be kept in mind that the statute of limitation can only help you in winning a judgment in case the creditor approaches a court.The statute of limitation cannot be of help to prevent a collector or creditor from filing a lawsuit against you . Though it can help you in winning the case but a case can be registered.
It does not remove the debt from your credit report. If you legally are responsible for the debt then it would still show on your credit report and you still owe the debt to the creditor . The debt is reported on your credit report till the credit reporting time is applicable on the debt .
Keep in mind that even a small step from your side can start off a new statute of limitation hence you should be careful and only if your financial situation permits you should go ahead and open the account again and pay off your debts .
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