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Article Series: Debt
Relief & Debt Consolidation
I Want To Get Rid
Of My Debt...NOW!
Statute
of Limitations On Debt
A lot debts that you may owe have been around
so long, you're absolutely sure you couldn't still owe on them
anymore. But wait, it depends entirely upon what kind of debt
you are looking at. The statute of limitations don't apply
to all kinds of debts, also just because they can no longer
go through the courts, doesn't mean they still can't legally
use other methods to collect the debt. Being in the dark about
these facts can lead you into a false sense of security. Some
examples of types of debts that do not have a statute of limitations
include, federal student loans, many types of fines, past due
child support (depending on state limitations), and taxes.
Though taxes generally have a ten-year statute of limitations
but can be extended if the person claiming the debt knows the
proper paperwork to file. In this case you need to contact
a tax resolution expert who can help you figure out the best
solution for your situation.
Some things you need to know about lengths of statute of limitations
include how long they generally are good for. First of all,
a lot depends on your specific state's rules and regulations
that are in place. These are called your state's civil
debt collection codes and vary a lot state by state. In general
unsecured debts are good for three to six years from the last
payment made by you or last activity on the account. Any kind
of written debt, such as a car loan last for six years, while
judgment's can be good for up to twenty years but usually require
a renewal every six years. Of course, you need to be very careful,
because although the statute of limitations usually starts
when the agreement is first signed, a lot of states allow for
tolling, or changing the statute of limitations. Tolling is
what allows the debt collectors to actually stop the statute
of limitations for a period of time. This, of course, can get
you into big trouble if you don't do your research ahead of
time.
Another thing you need to be very careful about is making
a payment all of a sudden or if you sign a promissory note
of any kind you could actually restart the statute of limitations
on your debt. If you are not fully aware of the rules of your
specific state you should check everything before doing either
of these things. Therefore if you make sure you know all your
states regulations you will avoid unnecessarily restarting
a statute of limitations on a debt that is no longer valid.
This also means that each time you actually make a payment,
in some states it is allowed to restart the clock on the statute
of limitations. Also, if you decide to make a payment, even
just a token one because a debt collector calls you attempting
to collect a old debt that has a statute that has expired,
this can open the door for them to now open a judgment against
you, that can continue for twenty years, instead of the original
statute, so be careful! A lot of people wrongly believe that
most statute of limitations on debts is seven to ten years.
But this is incorrect, because this usually only applies to
what can actually show up on your credit report. So don't be
suckered into believing that they are one and the same, they
are not.
You must also understand that just because a statue has expired,
does not mean that they can no longer attempt to collect the
debt. They can even take you to court, if they choose, unless
it has been taken care of by the filing of bankruptcy on your
part. However if a debt collector does take you to court and
you are fully aware that your debt has expired under the statute
of limitations, you can raise this objection as your defense.
Many states will allow this as a defense and will usually dismiss
the case at this point. This requires you to show up to the
hearing however, since if you do not the debtor has an excellent
chance at winning the judgment and having even longer to collect
the debt, up to twenty years. Many debtors will deliberately
set it up to end up this way, so be aware!
As you can see, just because a statute of limitations has
expired on a debt, does not mean it can no longer be collected
on. In fact it can mean that you could end up in deeper debt,
then when you started. So of course the best thing to do would
be to keep paying, and not miss any payments or as few as possible,
therefore avoiding this entire mess to start with. However
if you do find yourself in this situation, make sure you are
fully aware of your rights and what you can do or say to defend
yourself, to keep it from going any further than it has to.
Click here to discover my current SolveYourProblem recommendation and choice pick for the fastest, easiest and best debt relief solution you'll find anywhere. Get it and reward yourself with more cash in your pocket.
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by SolveYourProblem.com
: 2007
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