Debt Free Destiny

A statute of limitations in basic terms is the time limit that legal action can be taken following an event. In the case of debt each state has timeframes that identify a statute of limitations for debt collection. The FDCPA or Fair Debt Collection Practices Act sets some guidelines for the statute of limitations for debts.

A statue of limitations is often used in legal proceedings to determine if a debt is still considered a debt that needs to be paid or a debt that is considered null and void based on the timeframe that it has gone unpaid. This depends in part on the agreements that can be produced that indicate when the agreement was made between the creditor and debtor and when the statute of limitations on the debt began. Agreements come in many forms and all agreements are considered legally binding, even verbal agreements. Making a verbal agreement to pay for something and then not doing so can be a cause for legal action if the agreement is not honored.

With credit card debt the statute of limitations may depend of if the written agreement can be produced. For example if a creditor is attempting to collect a 10 year old debt and they not longer have the original written contract holding the borrower to the debt it may default to a statute with a lesser timeframe or it may just be discounted all together. Again this depends on the individual circumstances and the state you live in. When the statute of limitations begins is consistent. The statute timeframes begins to run when you have made the first violation against your contract. The first time you fail to make a payment on your credit card debt you as the debtor have violated your agreement and starting then the creditor may take legal action against you for contract violation.

The legality of the regulations that govern the statute of limitation works is consistent across the country. The FDCPA sets forth the rules and practices that govern the law. States have the right to set their own state laws and practices on many public issues. In the case of the statute of limitations as they relate to debt the timeframes vary greatly from state to state. Those who are looking into the statutes of limitations should always ensure that they refer to specific information for their state.

Consumers looking for debt relief will find that the statue of limitations may be a tool in assisting them with this relief. The statute of limitations does not take the debt off of your credit report nor does every debt appear on your credit report. It is not uncommon that debt collection agencies will attempt to collect debts despite the statute of limitations being expired. Legally creditors can attempt to collect debt regardless of the length of time it has been outstanding and just as legally if the statute has expired, the consumer has a right not to pay it.