The debt collection statute of limitations refers to the window of time that collection agencies can continue to legally pursue delinquent, unpaid debts. This basically means that unpaid debts have an expiration date, after which collection agencies have to stop with their collections activities. The time period for collecting a debt varies based on the individual states. Also, this time period should not be confused with the time limit for credit reporting, which is a distinct and separate issue. Statute Of Limitations Time PeriodKeep in mind that the time period commences from the date of the last reported activity on the account. This date is shown on your credit report. This is a completely different date from the date the account became overdue. Activity on the account includes making a payment, entering a payment agreement or even making a promise of a payment. For instance, if a customer makes one partial payment, this can reset the time period back to zero on the day the payment is made. Customers intending to ignore paying their bills altogether can avoid making any contact at all. These delinquent debtors know that by allowing the clock to lapse, then the possibility for collecting the debt has passed because of the missed opportunity window. How Can These Statutes Help Businesses? When business owners understand how the debt collection statute of limitations works, they can start to use these rules to their advantage and help in their recovery strategies. Understanding that encouraging delinquent clients to make partial payments or even enter into payment agreements can begin the statute of limitations time frame over again from zero can be a way to increase the amount of time you have to collect overdue debts. It can also be a way to force business owners into action. When It’s understood that there is a time limit on the amount of time you have to sue for an unpaid debt, then you may consider reviewing your recovery strategies or even contracting third party collection agencies to help you recover the debts sooner rather than later. What Is Covered by The Debt Collection Statute Of Limitations? Debts that are excluded under the statute include child support, federal student loans, and federal and state income taxes. There is no expiration date that prevent collecting these types of accounts. However, most other types of credit agreements are covered. If you’re in any doubt about how the debt collection statute of limitations may affect your own collection strategies then its important that you contact third party collection agencies to help you navigate through your rights.
Related posts:
- No More Teachers, No More Books, Just Collection Agents’ Dirty Looks: Student Loan Debt Relief
- Student Loan Debt Consolidation – Students Cannot Afford to Lose Sleep over Debts.
- Unemployed and Cannot Repay Credit Card Debts? – Legal Tactics to Eliminate Credit Card Debts
- How Would Tying Student Loans to Repayment Rates Affect Higher Education
- Your Past Is Not Your Potential
