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Debt Collection: Statute of Limitations

written by: M Lambert•edited by: Laurie Patsalides•updated: 5/14/2009

Debt collection statute of limitations are in place to protect the consumer. It is important to understand what statute of limitations apply to you, so you can protect yourself.

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    Debt Collection Statute of Limitation

    If you are being hassled by debt collectors, you may be wondering about debt collection statute of limitations. The statute of limitations determines when bad credit marks will drop off of your credit report. It also sets the amount of time that creditors are allowed to sue you for payment of the debt. Generally debts will drop off of your credit cards after seven years.

    The debt collection statute of limitations will vary from state to state and may also vary depending on the type of debt that you have. The laws may vary depending on where you first took out the debt and where you are currently living. If you are confused about your specific situation you may want to contact an attorney to have the law around your situation explained to you.

    It is also important to realize that the debt collection statute of limitations just stops the creditor from being able to collect the debt. It does not erase your debt or remove your obligation to pay the debt off. Only bankruptcy can clear you from your obligation to pay your debts off. However you can stop your creditors from hassling you if the statute of limitation has run out. You should send a certified letter with a return receipt requested stating that the statute of limitations has expired and requesting that they stop hassling you.

    You can restart the debt collection statute of limitation by using your account or making it active. Most companies start counting the period of time from the time of the last activity on the account. This would be the last charge or the last payment that you have made on the account. If you have stopped making payments, but then start again you will reset the statute of limitations. Settling the old debts will allow you to clear up your debts, but will leave the mark on your credit report for another seven years.