How Statutes of Limitation Affect You

State Statute of Limitations Chart

What are statutes of limitation and how can they affect your debt?

  • A statute of limitations is a law that establishes a time limit for bringing a civil suit. This time limit is based on when the alleged event is claimed to have occurred. Statutes of limitation exist so that anyone wanting to file a civil lawsuit does so in a timely manner, forcing the legal dispute to come to a conclusion.
  • For consumer debt, a statute of limitations governs the amount of time allowed for a party that owns the debt to seek a legal remedy. Generally, the clock starts ticking on the statute of limitations once a breach of contract occurs. If the statute of limitations expires, the alleged wronged party can no longer take legal action.
  • Usually states will dictate in their laws specific time periods for specific contracts. Consult your state's statutes of limitation.
  • You should know the term “tolling statute.” Tolling statutes deal with events that cause a statute of limitations' clock to stop. One common instance of this is active military service. Click here to learn more.
  • Some states' tolling laws will suspend a statute of limitations, or totally reset the clock, when a partial payment, acknowledgement of a debt or promise to pay is made by the consumer. Consult your state's statutes of limitation.
  • It is important to know that even if the statute of limitations has expired on a particular debt, you are still obligated to pay the debt, depending on the state in which the debt was incurred. Because laws vary widely depending on the type of obligation and the particular state, consult your state's statutes of limitation.
  • It is acceptable practice in most states for debt collectors to continue to pursue a debt after a statute of limitations has expired provided that the debt collector does not threaten litigation.
  • Also you need to know that a state's statutes of limitation do not hinder a creditor or its agents from reporting a debt to a consumer reporting agency, provided that the debt is reportable under the provisions in the Fair Credit Reporting Act (FCRA).
  • The FCRA allows a debt to be reported for up to seven years from the date of delinquency, a longer time than many states' statutes of limitation.

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