Introduction
Dealing with old debt can be stressful, whether it’s about an old credit card or a loan. If this happens, it’s important to know your rights.
Although debt collectors and creditors can contact you about a debt as long as you still owe it, they can only sue you for a limited period of time. This period is known as the statute of limitations on debt. Here are answers to some frequently asked questions about the statute of limitations on debt.
What is the statute of limitations on debt?
Each state has its own laws regarding the statute of limitations on debt, and these laws can vary depending on the type of account. For example, credit cards and loans are different types of debt and may have different statutes of limitations. The limits in some states range from three years to six years or even ten years.
Do I still owe the debt after the statute of limitations expires?
The expiration of the statute of limitations does not erase the debt; it only restricts the creditor’s ability to use the court to force you to pay the debt. Therefore, you are still technically indebted, even if the statute of limitations has expired. There are only three ways to erase a debt: by paying it off, having it canceled, or discharging it in bankruptcy.
Can a debt collector contact me after the statute of limitations has expired?
The Fair Debt Collection Practices Act outlines the rules about when a debt collector can contact you and when they cannot. Debt collectors can still pursue you for the debt after the statute of limitations has expired. This may include sending letters, calling you, and reporting the debt to your credit report as long as it’s within the time frame for credit reporting. You can stop a debt collector from contacting you by sending a written message to cease contact.
Can I be sued for a debt after the statute of limitations has expired?
The statute of limitations limits the time that a creditor or debt collector can use the courts to force you to pay a debt. Some debt collectors may sue you even after the statute of limitations has expired. Their records may differ from yours, or they may hope that you cannot prove the debt is no longer legally enforceable. If you are sued for a debt after the statute of limitations has expired, go to court to defend your case by proving that the time limit has passed. Seek assistance from a legal professional for added protection. Note that if you ignore a court summons, the creditor may win a default judgment against you.
When does the statute of limitations on debt start?
One of the most confusing aspects of the statute of limitations on debt is knowing when the clock starts. You might say one date, and the collector might say another. Here’s the rule: the clock starts ticking from the last date of activity on the account. This could be the last time you made a payment, arranged a payment, or acknowledged ownership of the debt. Note that the last date of activity on the account for the statute of limitations differs from the last date of activity for credit reporting purposes.
What can restart the statute of limitations on debt?
Once the statute of limitations on debt has started, you don’t want to do anything that restarts it. If that happens, the debt collector gets more time to sue you for the debt. The statute of limitations can be restarted if you acknowledge ownership of the debt, make a payment, or enter into a payment arrangement.
Why is the expired debt still listed on my credit report?
It may
You check your credit report and notice that a debt beyond the statute of limitations is still listed. In some cases, this is perfectly legal. The reporting time limit for credit, which is seven years for most debts, can be longer than the statute of limitations for debts in your state.
How can I remove a debt from my credit report after the statute of limitations has expired?
The Fair Credit Reporting Act allows you to remove old debts from your credit report when those debts are inaccurate. The expiration of the statute of limitations is not a sufficient reason to dispute a debt from your credit report.
Was this page helpful?
Thank you for your feedback! Let us know why! Another
Sources
The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts in our articles. Read our editorial process to learn more about how we fact-check and maintain the accuracy, reliability, and quality of our content.
U.S. Federal Trade Commission. “Expired Debts.” Accessed February 6, 2020.
U.S. Federal Trade Commission. “Fair Debt Collection Practices Act.” Accessed February 6, 2020.
Credit.org. “Complete Guide to the Statute of Limitations on Debt.” Accessed February 6, 2020.
FICO. “Errors on Your Credit Report.” Accessed February 6, 2020.
Source: https://www.thebalancemoney.com/statute-of-limitations-faq-960882
Leave a Reply