The statute of limitations on debt collection
MSN columnist Liz Pulliam Weston recently wrote an article on the statute(s) of limitations on debt. The article’s main thrust is summed up well by the title and subtitle: “Is there a statute of limitations on debt? Yes, the clock ticks on credit-report scars and on the debts themselves. But that doesn’t necessarily get you off the hook.”
As popular knowledge holds, negative marks on your credit report must be removed in seven years. The statutes of limitation of various states govern how long a creditor or debt collector may sue you on any given debt. Of course, debt collectors may continue to try to collect the debt even though they cannot sue. Although since they have no real teeth, a debtor can fairly freely ignore them as long as the statute of limitations is past. Also, any payment can re-start the clock, even if the statute of limitations already expired.
There are other catches, as well, which Weston goes into in some detail. Read the article for more information.
[via Alabama Consumer Law Blog]
