Knowledge Center: — FAQ’s —- DEBT/COLLECTION TERMS —- STATUTE OF LIMITATIONS —- MILITARY DEBT —- COLLECTION PROCESS
Statute of Limitations
What is a statute of limitations?
When referring to debt, it is the length of time a creditor or collector has to take legal action against you. Once this time has past, they cannot pursue judgements against you or try to get a lien or garnishment of your wages.
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How long can an old debt be pursued
There is no limit to how long an old debt can be pursued. If you do actually owe the money, then the debt remains. If it is past the statute of limitations for your state, the creditor can no longer take you to court and you do have the ability to send a written request to have the collector stop contacting you.
Should I pay off a debt that’s past the statute of limitations?
It’s always a good idea to pay legitimate collection debts. Paying or settling collections will end the harassing phone calls and collection letters, and it can improve your credit rating. You should always request that the collector validate the debt in question before you pay anything. If you do owe the debt, you really need to weigh the amount you owe against the negative impact it has on your credit rating.
How will a debt that’s past the statute of limitations affect my credit report?
Since you technically still owe the debt, it will lower your credit score and make it more difficult to get new credit.
Even if you pay off the debt, it can stay on your credit report as part of your credit history. Credit bureaus are strongly against allowing a creditor to agree to remove an item if you agree to pay it off because doing so will be less accurate.
Usually though, your credit score will improve if you pay off old debts even though the record remains on your credit report.
Can the statute of limitations be extended?
The Federal Trade Commission notes that in certain states, if you agree to payment arrangements or make a payment the debt is revived and the statute of limitations is reset. So you need to be very careful how you deal with older debts.
Once a debt is past the statute of limitations, is it ‘erased’?
No. This doesn’t erase the debt. You still owe the money and it can still show up on your credit report as a negative line item. Collection accounts can remain on your report for over 7 years.
Statute of Limitations laws vary from state to state. The chart below shows the differences time in years for each state jurisdiction.
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