Maximum Debt Duration – An Overview

Have you ever had a debt transferred from one collector to another over a long period of time? At some point, the cycle should stop, right?

Statute of Limitations on Debt

Many confuse the statute of limitations on debt with the statute of limitations for credit reporting. Although both are time limits related to debts, they have different implications and are triggered by different events in the life cycle of the debt.

How to Use It to Your Advantage

Some debt collectors may continue to try to collect a debt after the statute of limitations has expired. Consumers who are unaware of the statute of limitations or who feel intimidated by the collection agency may pay to avoid worse consequences, such as a lawsuit. If you are certain that the statute of limitations has expired, this is your defense against paying an old debt.

Fighting Debt Collectors

After Asset Acceptance was sued by the FTC in 2012, one of the largest debt buyers, they agreed to inform consumers when their debts had reached the statute of limitations by including the statement “Due to the age of the debt, we will not sue you” in the debt collection notice. It may also include the statement “And we will not report it to any credit reporting agency.”

How Does It Apply to My Debt?

The statute of limitations typically ranges from three to six years, but it can be up to 15 years in one state. Check the full list of statutes of limitations on debt by state to find out the statute of limitations on debt in your state.

What the Statute of Limitations on Debt Does Not Do

When the statute of limitations on debt expires, it only prevents the debt collector from winning a judgment against you when you can prove the statute of limitations has expired. It does not do the following:

• Prevent the debt collector from suing you. It can prevent them from winning if you use it against them in court.
• Erase the debt. If the debt is valid, you still owe it until it is canceled by the creditor or discharged in bankruptcy.
• Prevent the debt from appearing on your credit report. The debt can still be reported as long as the statute of limitations for credit reporting allows it.

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Source: https://www.thebalancemoney.com/statute-of-limitations-on-debt-960565