Statute Of Limitations (SOL)
|Credit Repair Articles - Collections|
Every state has laws that place limits on various types of legal action.
What is generally of greatest interest in the world of credit repair is the statute of limitations on debt collection, which may be named specifically in the laws or covered under a more general blanket statute of limitations.
The best place to find the statute of limitations for your state is to check with your state attorney general's office or to review the actual statutes of your state, which can usually be done online.
Yes, there are lists online that have "statute of limitations by state" but these are not guaranteed to be correct and are quite possibly outdated, so it's best to go straight to the source for your own state and find out.
Once you know the statute of limitations that affects debt collection in your state, you need to know the "date of first delinquency" of any debt that has gone to collections.
The statute of limitations clock (usually) starts running from the date of first delinquency, so you'll need to use some basic math to determine if the SOL on the debt has expired. (Note: there seems to be some room for argument/discrepancy with regards what date matters for the statute of limitations, so it is advisable to consult with an attorney in your state regarding your specific case to be sure.)
Once you have this information, you can go about the dispute process with the collection agency in one of several ways.
One approach is to simply put the collector on notice that the debt is past the SOL, and if they have violated the law in any way in their attempts to collect (which is highly possible), you now have the right to sue and they do not. This leverage can be used to force removal of the collection account.
Note that it is a violation of the FDCPA for a collector to threaten to take an action that they cannot legally take. So if they are threatening a lawsuit on a debt that is past the SOL this is likely an FDCPA violation.
Another approach is to consider the fact that since the SOL has expired they have no "legal" authority at that point to collect on the debt. By this reasoning any collection attempts, including reporting to the credit bureaus, amount to extortion.
Some consumers have also employed the "squeaky wheel" method on debts that are past the SOL. The basic idea is that when the collector has no "legal option" for collecting the debt, consistent pestering from the consumer can become costly for the collector.
The problem with using the statute of limitations to fight collection accounts is that the courts haven't exactly worked out all the legal details yet. You could run into road blocks based on the gray areas of the law that haven't yet been hammered out in litigation.
Even with the legal ambiguity, techniques based on the SOL are still a useful and valuable addition to have in your credit repair arsenal.