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The Statute of Limitations and Knowing When To Pay Your Debt

On Behalf of | Jan 15, 2013 | Consumer Protection, Firm News

If you have old debt, it is important to know that a
may not file a
lawsuit against you or report a debt on your credit
.  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

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
, contact SmithMarco P.C.
for a free case review.