Beware of the Statute of Limitations.
Every state has a statute of limitations (an SOL) that applies to lawsuits brought to collect debts. They all work pretty much the same way.
These statutes mean what they say. The practical effect is that once you stop paying on a debt, your creditor has a certain period of time (from one year to six years, depending on the state) in which to file suit in court. If the creditor fails to sue before the deadline, the court won’t accept any filing after that, and the case will be thrown out if they decided to sue. The creditor will be out of luck.
Once the deadline passes, the creditor no longer has any power to sue and enforce its claim in court. It can never, ever get a court judgment against you. This is huge! This is a good thing from the consumer’s point of view.
Now, at this point in this discussion, you’ve probably got a couple of excellent questions:
- Once the SOL has run (once the deadline passes) on my debt, does this mean that I don’t owe the money?
- Once the SOL has run, does it mean that the creditor must stop its efforts to collect?
The answer to both of these questions, unfortunately, is NO. You still technically owe the debt, and the creditor is still entitled to try to collect. What you creditor cannot do is haul you into court as part of its collection efforts.
Whether the SOL has run or not is always going to have a very important bearing on how you approach getting that unpaid collections item removed from your report. I encourage you to do your own research for the state you live in before attempting to deal with any of the unpaid collections accounts on your reports. Here’s a link to a site that should get you started: SOLs by State. It has a handy map where you can just click on your state and read the statute for yourself.