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Is my debt too old to collect?
There are laws from against regulators who resuscitate old, paid-off debts, and debts that are not even theirs. There are two main types of debt limitations that you should know.
The first limitation is how long your debt can show up on your credit reports. Generally the law regulates that credit bureaus must drop negative reports on you after 7 years. The clock starts 180 days after you start missing your first payment. Keep in mind that there are exceptions. If you claim bankruptcy, it may remain on your reports up to ten years. Some debts like unpaid tax liens can indefinitely stay on your credit.
The other limitation on debt is “the statue of limitation”. In plain English, collectors are only allowed certain amount of time to sue you over the debt. The length of time may vary by sate. For instance, the statutes of limitations on most debts in California for oral contracts are only two years and four years for written contrast. On the other hands, collectors in the state of Kentucky can sue of 5 years for most debts, including credit card debts.
Here are some important things to remember about statutes of limitations:
- Don’t restart the clock: The statue of limitations starts counting from the day of last activity such as last payment or purchase from the credit card. A payment on an old debt can also extend the statute of limitations in some state.
- Even though the law may protect debtor from collector after the statute of limitation, some creditor may still sue or threatening to sue you. You need to prove in court that the statute of limitations has expired.
- If you move to another state with different law, the creditor may try to sue you.
If you are certain that your debt is too old to collect, you should send the letter to the creditor. Let them know that the statue of limitations has expired, or the debt is not even yours.
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