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Know the Statutes of Limitations to Handle Debt Collectors

Every state has a statute of limitations (SOL) that limits how long the courts can be used to collect a debt. After a debt is between 2 and 15 years old (depending on your state of residence) without a payment having been made, it becomes history as far as the law is concerned.

Check out your state’s SOL rules before speaking to collectors. Debts that are too old can’t be enforced in a court of law. This turns even the fiercest collector into all bark and no bite.

A debt may be too old to collect under the SOL, but if it is less than seven years old, it will stay on your credit report and detract from your creditworthiness until it drops off.

Here’s what to do if you think you may have an old debt that qualifies for SOL treatment:

  • Verify the last time you made a payment. Use your credit report or, if you keep checking account records for seven years, find your old check registers. Depending on your bank, you may be able to access checking-account payments from long ago. You don’t want to see any recent payments here. Making a payment resets the clock on the SOL.

    Say it has been 6 years and 51 weeks since your last payment, and the SOL is 7 years. If you make a payment, the 7-year period starts all over again. So expect some pressure from the collector to get you to send in any amount as the SOL date approaches.

  • Check out what your state’s age limit is for SOL status. The info isn’t a legal guarantee, but it is grounds for you to see a lawyer if you believe that your debt may qualify.

  • Get a real legal opinion. Yes, you should see a lawyer even though it may cost you some cash. Don’t trust your friends or cousins. This is a legal matter, and only a lawyer can drive a stake through the heart of a dead debt.

  • Have the attorney write a letter. The letter should include documentation of the debt’s age, proof that it’s over the SOL limit, a statement that you don’t intend to pay a penny, and a note that all future contact must go through the attorney.

    No collector will bother to try to collect an uncollectible debt from a lawyer who knows better. And collectors can’t go around the attorney after you notify them that you have a lawyer, or they can be sued.

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