When you get one phone call from a debt collector, it can sometimes seem like those calls are never-ending. And in many cases, your debt might get transferred to a different debt collector, which simply restarts the cycle of phone calls. These debts can hurt your credit score significantly, but when you work with credit repair experts, you can find solutions. Debts cannot be pursued indefinitely since there is a statute of limitations. Here are some factors you should know about.
Statute Of Limitations vs. Credit Reporting Time Limit
The statute of limitations on debt can vary, but the time period begins on the last date of activity on the particular account in question. Once the statute of limitations expires, then the debt is no longer enforceable legally. In California, the statute of limitations is 2-4 years.
The credit reporting time limit is different from the statute of limitations. This involves how long debts can remain on your credit report. Each type of debt is different, but serious debts like bankruptcy can remain for ten years.
Avoid Restarting The Statute Of Limitations
One thing credit specialists will caution you on is restarting the statute of limitations. To take advantage of the statute of limitations, the account must be inactive throughout the time period. So making a payment, or even indicating that you will make a payment, is an indicator of an active account and will restart the statute of limitations on that day. If you ever want to file a lawsuit, one of your best defenses is the statute of limitations, so you need to keep it in place.
Will The Statute Of Limitations Erase Debt?
While the statute of limitations should be considered, credit repair experts don’t always recommend banking on it to get rid of debt. What the statute of limitations does is prevent a collector from winning a lawsuit against you, but it won’t stop them from filing the lawsuit to begin with. Also, it will not erase your debt. You owe any debts until the creditor cancels it or until it is removed via bankruptcy. The statute of limitations also has no impact on the credit reporting time limit, so the debt will stay on your credit report for as long as it is allowed.
The statute of limitations can be confusing, so it’s always valuable to speak with credit specialists about your specific situation. Core Credit Solutions specializes in helping people fix credit in Los Angeles. If you need help from a credit expert, don’t hesitate to contact us and schedule a consultation.