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March 31, 2015

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What's the Statute of Limitations on Debt?

By LaToya Irby, About.com Guide


Debts have sort of an expiration date known as the statute of limitations (SOL) that keeps debt collectors, and even the original creditor, from pursuing it indefinitely. Before you agree to pay an old debt, first make sure the statute of limitations hasn’t expired. If it has, you might not have to pay.

A lot of people get the statute of limitations confused with the credit reporting time limit. While they’re both time limits related to debt, they have different effects.

The credit reporting time limit is the max amount of time credit bureaus can report delinquent debts on your credit report. For most types of accounts, it's seven years from the date of delinquency. However, bankruptcies are reported for 10 years and tax liens can be reported for up to 15 years. The credit reporting time limit is dictated by the Fair Credit Reporting Act and does not influence the statute of limitations for collecting a debt.

The statute of limitations for collecting a debt is the period of time that a creditor or collector can use the court to force you to pay for a debt. The time period starts on the account’s last date of activity and varies by state.

How to Use the Statute to Your Advantage

The statute of limitations starts on the last date of activity on the account. (Keep in mind this can be different from the date the account went past due.) Your credit report will include the account's last date of activity.


Even if the statute of limitations has expired, some debt collectors will continue to attempt to collect. They're hoping you don't know about the statute of limitations and you'll pay up if they threaten you enough. They may even file a lawsuit against you. If you are certain the statute of limitations has expired, you can use that fact as justification that you do not have to pay the debt.


Be careful not to restart the statute of limitations. Anytime you take an action with an account, the statute of limitations is restarted. Making a payment, making a promise of payment, entering a payment agreement, or making a charge using the account can restart the statute of limitations on an account. When the clock restarts, it restarts at zero, no matter how much time had elapsed before the activity.


The Statute of limitations for NC is (3) years from the last date of activity, it will vary from state to state. To find your site click the link below  http://www.nolo.com/legal-encyclopedia/statute-of-limitations-state-laws-chart-29941.html

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