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Statute of Limitations is the period of time each state allows a creditor legal remedy to collect on delinquent accounts. After that period of time has expired, the creditor may still try to sue to collect on a debt, but the consumer then has a legal defense that the debt is time barred (expired SOL) and the case may be thrown out of court. A creditor or collection agency in most states can still continue with other collection efforts such as reporting the allowed time the FCRA allows. And continuing to send consumers dunning letters (collection letters) to try to collect on the debt.

When deciding to start credit repair, initiating disputes with the credit reporting agencies, please consider a few things first about Statute of Limitations:

What are your financial means? Are you capable of paying on any outstanding debt on the chance that it comes to doing just that!

If you are not financially capable of paying, then you might re-consider pulling your credit report, little lone initiating disputes with creditors, collection agencies or credit reporting agencies.

Just pulling a credit report, may activate an existing skip trace placed on the file by the creditor or collection agency - when this happens just as soon as your credit report is accessed, the credit reporting agency as a service notifies the creditor or collection agency that placed the skip trace of the recent access by you to your credit file... or anyone pulling your credit report for that matter.

Usually following such a notification will be an inquiry into your credit report to see if new addresses exist so that they can pick up collection efforts again.

Some people are more aggressive, and will jump right out there regardless of waking up collection agencies. These people are more on the offensive, running with request for debt validation, in a hope that the collection agency will be unable to verify thus relinquish collection efforts on an account and remove their reported listings with the credit reporting agencies.

But just because you chase them off does not mean that you won the war, only one battle, because collection agencies if they don't want to fight this way, they will either 1) return accounts back to the original creditor, or 2) sell the account (if they own it) to another collection agency. Thus putting you at square one again, or worse dealing with an original creditor (who is not obligated to abide by the Fair Debt Collection Practices Act) as collection agencies are bound by.

Creditors are only obligated to validate debt, if you request validation within 30 days of their initial collection letter. Many times consumers move around and don't receive that initial collection letter, just because you did not receive it does not mean that you are in the clear years later to request the debt validation. Some collection agencies will validate the debt, but years later many will not. Especially 2nd and 3rd collection agencies working the account.

Highly recommend reading up on the Fair Debt Collection Practices Act when ever a collection agency holds an account!

http://www.ftc.gov/os/statutes/fdcpa/fdcpact.htm

My warning is to those that would want to initiate action while within the Statute of Limitations; you can sometimes run into collection agencies fully willing and capable of verifying your ownership to a debt.

When this happens, you have no recourse, meaning they know they won the battle, and next step if they are legally licensed and have legal representation can result in them taking you to court to file a judgment.

Worse thing about this is if allowed by your state laws, can result in wage garnishment, or liens against properties. This does not mean every creditor or collection agencies will seek this remedy once a judgment is obtained, but it is possible.

I understand that sometimes consumers are cornered and have no choice but to try these means, I just think that it is important to put out these warnings before hand so that you can evaluate the risks to your specific case first to decide for yourself the best course.

If you are in the Statute of Limitations it might mean that the collection agency does validate, and that they are in their right to sue, and that you would be forced to negotiate settlement to for go judgment being filed.

If you are not able to address past debt issues, you should look up what your statute of limitations are for that type of debt and wait until that period of time has passed, it is also important if you are going to try to clean up your credit that you maintain documentation showing when the account initially went default, because if you are not careful a collection agency will alter the reporting making the debt appear to be still within SOL when it is not. And it would then be your word against theirs and not likely to win in court.

It is just a given that if you run into financial problems, you are going to be at least stuck with a period of time that it is not safe to dispute these accounts without opening yourself up to further financial trouble.

After the SOL has expired and provided you have the proof, can be either statement direct from the creditor or copies of your credit report when the account initially went default, but after that time has passed. There are many that will begin credit repair, to review credit reports for errors, and begin the process of disputing, and using all technical advantage to remove such negative listings before the 7 year reporting period is up on most account listings.

Just be careful and review first the laws, and consider the consequences if you fail what it might cost you later on.

Posted: Thu May 05, 2005 8:18 am Subject:

Hi,
So does it mean time barred debts cant be claimed in any way?Does it also imply that time barred debts are as goos as bad debt?
If you can please clarify this point.
Thanks
Mike

Posted: Thu May 05, 2005 3:29 pm Subject:

Sorry you were not clear enough for me on the question. Will try to answer.

If the debt is time barred or out of SOL, then it means that the consumer has a legal defense not to pay the debt.

A creditor or collection agency can still try to pull a fast one and file a judgment, a lot of times consumers fail to appear in court to defend themselves.

If you do go into court, the consumer needs to prove to the judge that the debt is time barred. Past credit report, billing statements or such.

Sometimes creditors and collection agencies have been known to re-age debt, to report falsely a more recent time as the last activity date so that it 1) extends the reporting period or 2) makes the debt appear to still be within the statute of limitations.

Very important that consumers keep past copies of credit reports, to show what is correct, or keep past billing statements showing originally when the debt defaulted.

When the debt is written off, charged off - that creditor already took a tax break from the IRS, so to them it is already claimed as a loss... if they get paid later down the line, then they have to report it as income and pay taxes to the IRS later.

The law was put in place on purpose to protect consumers from creditors or collection agencies being able to pursue them indefinitely on outstanding debt.

It is going to be the last stand now with the recent changes to bankruptcy laws.

Posted: Thu May 05, 2005 9:07 pm Subject: RE:

Hi Pammila,

Thanks for the clarification Pammila. I'm sure Mike will find this interesting. Smile

Please share your knowledge and insights with us always and help us to learn better. Am also eagerly waiting for the e-book you promised to share with us. Very Happy

Take care and stay tuned,
Jason

Faith · Posted: Tue Jan 17, 2006 1:43 pm Subject: disputed old phone bill

Back in 2002 some outrageous phone fees appeared on my phone bill. SBC could not explain where the fees came from or what they were for. They just appeared on my bill one month. I disputed them and was told they were removed and they were.... until last week- a collection agency called and said I owed SBC over $500!! from 4 years ago!

Posted: Tue Jan 17, 2006 2:42 pm Subject:

Josie Bell · Posted: Tue Jun 27, 2006 9:26 pm Subject: credit bureaus

how long in the state of south dakota after statue of limitations expired can deliquent debt stay on your credit report.

Posted: Wed Jun 28, 2006 2:35 pm Subject:

You are confusing the SOL for collecting and CRA's for reporting. When you stopped paying on an acct or a Ca places an acct on your report it will stay on your credit report for 7 yrs.

Posted: Wed Jun 28, 2006 3:27 pm Subject:

South Dakota

Legal: 6%
Judgment: 12%

STATUTE OF LIMITATIONS (IN YEARS)

Open Acct. for services: 6
Sale of Goods: 4
Written Contract: 6
Domestic Judgment: 10 renewable
Foreign Judgment: 10 renewable

BAD CHECK LAWS (CIVIL PENALTY)
Amount due, collection fees of $20, and $100 or 3x check whichever is less.

GENERAL GARNISHMENT EXEMPTIONS
Greater of 75% or amount each wk. = to 40 x fed. min. hourly wage. Plus $20.00 each household dependent.

COLLECTION AGENCY BOND & LICENSE

Bond: $20,000
License: Yes
Fee: $200

Exemption for out-of-state collectors: Out-of-state collectors may be exempt if [1] collecting only; [2] their office is located in a state that has a reciprocal law; and [3] the state has "enacted similar legislation".

Guest · Posted: Wed Jun 28, 2006 4:10 pm Subject:

Kb,how are you long time no talk. This is lefty.

Posted: Wed Jun 28, 2006 4:15 pm Subject:

Kb disregard above post this board hates me I have to login every time, what a pain. So how are you. glad to see you over here i had read your first post above and knew it was you.

Posted: Wed Jun 28, 2006 4:25 pm Subject:

Lefty, who said this board hates you?? You are always welcome here. The login makes your identity prominent. Smile

Posted: Wed Jun 28, 2006 4:27 pm Subject:

I have read Pammila's posts in a lot of places. You have so much of knowledge!!! I haven't seen you writing in this board since a long time. How are you? BTW Smile

Posted: Wed Jun 28, 2006 7:08 pm Subject:

I have been doing fine, in fact just moved recently and looking to get married again next year. I have been over to Cardratings. What happen to AOC?

Great to see you Lefty, how have you been doing?

Thanks Anthony, very kind of you to say. I always keep notification turned on when ever someone posts so that I can follow up.

I am still working and will drop in more often now that I have settled down from my recent move.

Posted: Thu Jun 29, 2006 4:47 pm Subject:

Feeling good to hear about your marriage plans. Now you won't feel lonely anymore. How is your health, BTW? Are you taking care of it nicely as you are heading towards the new life.

Posted: Sat Jul 01, 2006 3:51 pm Subject:

I am Bipolar, Attention Deficit Disorder, Borderline Personality, and Post Tramatic Stress Disorder. Doctors put me on Geodone, Zoloft, Clonazepam, and Concerta. So far the last year I have been pretty stable. Not always focused as I would like to be but it is a balancing act with all the medications.

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