Many people may not realize it, but there is a limit to the length of time a creditor is allowed to file suit in order to collect a debt. Governmentally enacted statutes of limitation exist as means for the consumer to attain some level of eventual resolution and to provide debtors with a defense against abusive or illegal collection practices. The past ten years have seen a rash of aggressive and unscrupulous debt collectors hounding borrowers for payment of debts exceeding the lawful boundaries of its statute of limitation in the hope that the borrower is unaware of their legal rights and can be threatened to the point of agreeing to settle up on a debt past the designated margins of enforceable collectability.
What is the statute of limitations? It is a legally prescribed limit of time during which a creditor is allowed to lawfully collect repayment of debt. The time period is calculated from the time of the debt's last recorded account activity. State law determines the time span specifics and these differences therefore require verification through your State Attorney's office. Though the statute of limitations safeguards your obligation to old debts, it does not actually prohibit creditors from filing suit. It is therefore essential to be familiar with the chronological details of your debt so that a valid defense can be provided in defense of any efforts to collect.
Remember, you don't want to entirely trust the information given by the original lender or, especially, a collection agency that bought the rights to pursue your credit card debt after a certain duration of time. Statutes of limitation apply to any unsecured revolving debt line of credit; precisely how long the legal liability a given loan will remain depends upon the location of the debtor's primary residence. As you might already be able to guess, through carelessness or differing interpretations of the situation or an arrogant disregard for the rules guiding credit card debt reclamation, many of the telephone warriors employed by the lenders do not always set aside a file on the very first day that the legal ownership of past funds disappears into memory. For that matter, though the credit reporting agencies would obviously have no particular eye for profit wrangling from bill collectors or any possible cause to side with the companies holding credit card debt notes, it is remarkable and somewhat frightening how often the credit bureaus fail to ignore their own data and continue recording the erroneous negative marks.
Unfortunately, the responsibility for arranging the statutes of limitation – and enforcing the issues – has been left to the states, and each one goes about the process a little differently. Most of the different regulations around the country use seven years as the primary bench mark, but you will want to do the research for yourself to take out the possibility of guesswork. If you are at all unsure about whether or not your credit card debt could still be the subject of a lawsuit, you should take it upon yourself to contact the office of the attorney general for your own state of residence to ascertain the most information surrounding the continued liability of any financial obligations. So long as you are absolutely certain that the credit card debt in question is firmly past the relevant statute of limitations, you should immediately inform the lender's agents or the bill collectors' telemarketers that by law they have to stop their harassment.
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