Whether you carry a wide range of debt on your charge cards or pay them off each month, it might surprise you to identify out that there's a statute of limitations on repaying your debt.
Usually when statute of limitations is discussed, it's being referred to in criminal terms. State governments have a certain amount of time to bring charges against an individual for a criminal act. The statute of limitations on credit card debt is very similar. Credit companies have a specific amount of time to successfully get yourself a judgment against you. When they don't get the judgment, you no longer legally owe the money. The government Trade Commission describes credit debt as Time-barred Debts.
How long the credit companies need to obtain a judgment depends entirely on which state you live in. The time varies from 3 years to in excess of 10 years. Once that point is up, the credit company cannot even legally threaten to sue you. Just because they cannot take you to definitely court doesn't mean they need to quit to collect, they may still call or send bills within the mail. Often once the statute of limitations is almost up, the financial company will make a last push to gather the monies owed. Any acknowledgment from the debt, just like a small payment, can reset time limit to gather in court to the start.
Simply because there is a limited time that companies have to collect of your stuff, doesn't mean a failure to pay won't adversely affect your credit rating. Each month your financial obligation is reported towards the credit reporting agencies as unpaid, your credit rating takes a hit. Actually, despite the time to collect in the court is expired, those reported non-payments can stay on your credit history for seven years.
To find out just how long the statute of limitations is where you live, contact your State Attorney General's Office.
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