All debts in the United States have a statute of limitations on them. This does not mean that the debt a person owes a creditor will go away after a period of time. Rather, it means that the creditor have a limited amount of time in which to file a lawsuit to collect on her. The date from which the statute of limitations starts is usually the date on which the last payment to the creditor was made.
Statute of Limitations
The statute of limitations on a debt is the length of time allotted to a creditor to file a lawsuit against an individual who owes it money. The precise length of the statute will depend on the type of debt and the state in which the individual resides. After this statute has expired -- meaning that the length of time designated by the state has elapsed -- the creditor can no longer legally sue the individual.
Commencing Date
Usually, the date that the statute of limitations will start is the day on which the debtor last made a payment. However, in some cases, the statute may commence not when the last payment was made, but when the account was written off.
Resets
Depending on state law, there are a number of situations in which the statute of limitations may be extended or even entirely reset. For example, if a debt remains delinquent, but a person makes a payment on the debt, then the statute might start over at the beginning. In addition, if the credit card company sues and wins the case, then the statute might be reset again.
Considerations
According to MSN, the exact date from which a statute of limitations starts will depend on state laws. For example, in some states, a change of status may not just include a new payment on the debt. In some cases, agreeing to repay the debt through a different payment plan or even acknowledging that you owe the creditor money may extend the statute of limitations.
0 comments:
Post a Comment