Debt collectors can use a variety of tactics to pursue you for a debt, but some tools have expiration dates. Specifically, collectors have a limited time to file a lawsuit on old debts. The timeframe in which legal action can be taken is known as the statute of limitations. Once this period has expired, debt collectors no longer have the ability to use the courts to force you to pay old debts.
When does the statute of limitations clock start ticking?
The statute of limitations clock starts on the date of your last activity on the account. This is usually the date of your last payment, but it can also be the date of your last use of the account, the date of a promise to pay, the date of a payment agreement, or even the date you acknowledged responsibility for the debt.
A debt collector may file a lawsuit against you after the statute of limitations has expired. If a lawsuit is filed against you for an old debt, your attorney can use the expired statute of limitations as a defense to avoid a judgment against you. Knowing when the statute of limitations clock starts will help you determine if the statute of limitations has expired and assist you in deciding whether to pay old debts or leave them unpaid.
Determining the statute of limitations on your debts
When trying to determine when the statute of limitations clock started, your credit report is a good place to start. It will contain the last activity you had on the account according to the creditor or debt collector.
There are limitations to using your credit report to estimate the statute of limitations. Since your credit report is based on the financial activities and transactions conducted by your creditors, it is only useful for the statute of limitations when there is some sort of activity on the account the last time you did anything with it.
Verbal activities, such as a payment agreement made with the collector or an acknowledgment of the debt, are not reported to credit bureaus, so your notes or records (if you kept them) can help you determine exactly when the last activity on the account was.
You can request the creditor or debt collector for the date of the last activity on the account. Although they are not obligated to provide you with an answer, they must respond honestly if they choose to give you one.
Note: If you have doubts about the timing of the statute of limitations on your debts, contact an attorney, especially if the debt collector is threatening to sue you or has already filed a lawsuit against you.
Statute of limitations vs. credit reporting time limit
The statute of limitations is often confused with the credit reporting time limit, which is the period during which an old debt can be included on your credit report. The credit reporting time limit is always based on the date of the last missed payment on the account. Your credit report will include the date of the missed payment for credit reporting purposes.
Note: The credit reporting time limit is seven years for most types of debt.
The statute of limitations can still be in effect even if the credit reporting time limit has expired. In some states, the statute of limitations is longer than seven years. Or you may have reset the statute of limitations by taking some action, such as a payment agreement, that was not recorded on your credit report.
Was this page helpful? Thank you for your feedback!
Sources:
- The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
- Federal
Trade Commission. “Time-Barred Debts.”
Was this page helpful? Thank you for your feedback!
Sources:
- The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
- Federal Trade Commission. “Time-Barred Debts.”
Was this page helpful? Thank you for your feedback!
Sources:
- The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
- Federal Trade Commission. “Time-Barred Debts.”
Source: https://www.thebalancemoney.com/when-does-the-statute-of-limitations-clock-start-960891
.lwrp .lwrp-list-item.lwrp-empty-list-item{
background: initial !important;
}
.lwrp .lwrp-list-item .lwrp-list-link .lwrp-list-link-title-text,
.lwrp .lwrp-list-item .lwrp-list-no-posts-message{
}@media screen and (max-width: 480px) {
.lwrp.link-whisper-related-posts{
}
.lwrp .lwrp-title{
}.lwrp .lwrp-description{
}
.lwrp .lwrp-list-multi-container{
flex-direction: column;
}
.lwrp .lwrp-list-multi-container ul.lwrp-list{
margin-top: 0px;
margin-bottom: 0px;
padding-top: 0px;
padding-bottom: 0px;
}
.lwrp .lwrp-list-double,
.lwrp .lwrp-list-triple{
width: 100%;
}
.lwrp .lwrp-list-row-container{
justify-content: initial;
flex-direction: column;
}
.lwrp .lwrp-list-row-container .lwrp-list-item{
width: 100%;
}
.lwrp .lwrp-list-item:not(.lwrp-no-posts-message-item){
}
.lwrp .lwrp-list-item .lwrp-list-link .lwrp-list-link-title-text,
.lwrp .lwrp-list-item .lwrp-list-no-posts-message{
};
}
Leave a Reply