Statute of Limitations for Debt Collection

Statute of Limitations (SOL): A type of federal or state law that restricts the time within which legal proceedings may be brought.

In English, this means the period of time in which a creditor may legally sue you. This covers all kinds of debts including credit cards, oral and written contracts, as well as promissory notes. Additionally, the SOL varies from state to state.

Typically, a creditor will make attempts to contact you via phone, email or postal service until they can convince you to pay. Suing you is generally a last resort... and even if they do, sometimes it's just a scare tactic and the case will later be dismissed due to having no legal right to sue, as in the case of an expired SOL.

However, keep in mind that if a creditor has been unsuccessful in getting you to pay for several years and is nearing the end of the SOL, there are certain instances where the SOL can be reset.  One such instance is if the creditor can talk you into making at least one payment.

It is important to note that the SOL does not start until the day after the last payment was made before the account went into default. A single payment can take a past due account that was nearing the SOL and give the creditor brand new life. This process is often referred to as “resetting the clock”.

Resetting the clock starts the SOL all over again and gives the creditor a brand new time frame in which to sue you, should they choose to go that route. An expired SOL does not restrict the creditor from attempting to collect the debt. It only stops them from winning a judgement against you.

To find a list of the statute of limitations for all 50 states, click here.

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