Most people realize that if they owe money, the company they owe money will try their best to collect it, oftentimes sending a collection agency after them, destroy their credit score and also, in some cases, take them to court. But here’s a question; how long exactly can add company keep trying to collect a debt?
The fact is, nothing in this life lasts forever. Nearly anything that a person does, even most (not all) criminal activity, has what’s called a “statute of limitations” that keeps it from going on forever. Debt is one of the things that definitely has a statute of limitations, meaning that after a certain amount of years there is no way for a company, or a debt collection agency, to continue to pursue a person who owes that particular debt.
Tread with Caution
Here’s the deal; every estate in United States has different laws when it comes to dealing with debt, and debt collecting. Also, every law has their particular statute of limitations. For example, if you live in Florida, debt collectors have four years to collect on what they call “open accounts”, which includes credit card debt. After this statute of limitations expires, they have very few, if any, legal remedies in order to force you to pay that debt. It doesn’t mean that they won’t stop trying, but it does mean that they can’t force you to pay in a court of law.
One situation you have to be careful about however is acknowledging that the debt exists, or making a payment on that debt, however small. If you do, the debt that you owe can be reinstated even if it was legally uncollectible. The fact is that even though the statute of limitations reduces the legal remedies that companies or debt collectors have to get that money from you, it doesn’t remove the fact that you have a debt. You still owe that money, they simply can’t legally force you to pay it.
If you should happen to open the door just a crack however, you can rest assured that debt collectors will shove their foot in there and do everything in their power to get that money from you.
What about your Credit Report?
Most people don’t realize that the information on your credit report is determined by federal law, not state law. The “Big 3” credit reporting agencies, including Trans Union, Equifax and Experian, are obliged to remove negative information on your credit report after a period of 7 years. When it comes to bankruptcies, this information will stay on your report for 10 years or more.
What this means is that after the statute of limitations of either 7 or 10 years has passed, you can send a letter to all three of these credit reporting agencies asking them to remove these debts from your credit report, and legally they will be obliged to do so.