Know Your Rights

The Statute of Limitations and Knowing When To Pay Your Debt

If you have old debt, it is important to know that a debt collector Past _due _imgmay not file a lawsuit against you or report a debt on your credit report.  This is because the law limits the number of years a collector may sue you to collect a delinquent debt. The time period to file suit is known as the statute of limitations and varies according to both the state and type of debt owed. After the time period has passed, your debts are considered "time-barred" and while a collector may still make attempts at collection, it may no longer file suit. Under certain circumstances, the clock may be reset, and the time period may start anew making it important to know you rights under the Fair Debt Collection Practices Act ("FDCPA").

In the event a collector begins contacting you about a time-barred debt, the most important thing to understand is that a collector may still try to collect on it. Simply because a debt is time-barred does not mean it is uncollectable, however it does mean that you cannot be sued. If you think a debt is time-barred and the collector does not mention this to you, first, ask the collector if the debt is passed the statute of limitation to file suit. The FDCPA requires the collector to give you an honest answer to this question. If the collector fails to give you any answer, second, ask when the date of last payment was made. If the collector still fails to give you an answer, third, send a request for validation letter, which puts these questions in writing. This letter must explain that you are disputing the debt and requesting validation. The more information you give the collector about why you are disputing the debt, the better. For a detailed copy of a validation letter, you may visit our website.

The statute of limitations is not to be confused with the time with which a company has to report a debt on your credit report. The Fair Credit Reporting Act (FCRA) provides for the length of time an item can remain on your credit report. That time limit is completely exclusive from the statute of limitations. For example, the statute of limitations on a debt can be 5 years. However, the FCRA may state that a debt can be reported for up to 7 years. Thus, while a collector may no longer be able to sue you, they can still report the debt for two more years.

Remember, it is important to know your rights when dealing with collectors. Making a payment when the debt is time barred may result in re-opening the debt. If you feel your rights have been violated by a debt collector, contact SmithMarco P.C. for a free case review.


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