Statute Of Limitations
Statute of Limitations (SoL) on debt is the maximum amount of legal time that creditors have to take you to court in order to recover debts owed by you. Once the statute of limitations period is over, the creditors cannot take you through the court system to recover their debts. Statute of limitations does not cover all forms of debt, for example SoL does not cover federal student loans, most type of fines such as speeding/parking tickets, past due child support or income taxes.
Note: This information is provided for you to learn about your rights regarding debt and credit. It is not meant for you to have a reason to avoid paying your debts, just because there is an SoL period on them. If you do owe a debt and have the financial means to pay
it off, then it is your responsibility to do so.
Another important point to note is that once the Statute of Limitations period is over, this does NOT mean your debt disappears from the books of creditors. They still have other means of recovering their debts, only that they cannot take you to court and sue you. Statute of Limitations on debt depends first on the type of debt and your State's civil debt collection codes. In most states, unsecured debt expires 3 - 6 years after the last payment made on the debt, or the 'last consumer activity' on his account. Written contracts e.g. car loans usually expire in 6 years.
In other states, the Statute of Limitations period begins as soon as you sign your credit agreement to purchase something. However, most states have rules on the running of the statutory period while others have provisions that can adjust/stop the SoL period. For example, say you live in Nevada where the Statute of Limitations period on Open Credit is 4 years. You maxed out your credit card 2 years ago and haven't made a single payment since then. This leaves only 2 years left for the SoL period to be over. However, suddenly you decide to move to New York for 1 year for a better job contract and return to Nevada thereafter. Nevada statutes state that if you leave the state or voluntarily make a payment towards your debt, the SoL period tolls or "stops"! Thus, on the day you move back to Nevada from New York, the remaining 2 year SoL period starts running again, factoring OUT the 1 year you spent in New York.
Article Source: http://EzineArticles.com/6387100
Note: This information is provided for you to learn about your rights regarding debt and credit. It is not meant for you to have a reason to avoid paying your debts, just because there is an SoL period on them. If you do owe a debt and have the financial means to pay
it off, then it is your responsibility to do so.
Another important point to note is that once the Statute of Limitations period is over, this does NOT mean your debt disappears from the books of creditors. They still have other means of recovering their debts, only that they cannot take you to court and sue you. Statute of Limitations on debt depends first on the type of debt and your State's civil debt collection codes. In most states, unsecured debt expires 3 - 6 years after the last payment made on the debt, or the 'last consumer activity' on his account. Written contracts e.g. car loans usually expire in 6 years.
In other states, the Statute of Limitations period begins as soon as you sign your credit agreement to purchase something. However, most states have rules on the running of the statutory period while others have provisions that can adjust/stop the SoL period. For example, say you live in Nevada where the Statute of Limitations period on Open Credit is 4 years. You maxed out your credit card 2 years ago and haven't made a single payment since then. This leaves only 2 years left for the SoL period to be over. However, suddenly you decide to move to New York for 1 year for a better job contract and return to Nevada thereafter. Nevada statutes state that if you leave the state or voluntarily make a payment towards your debt, the SoL period tolls or "stops"! Thus, on the day you move back to Nevada from New York, the remaining 2 year SoL period starts running again, factoring OUT the 1 year you spent in New York.
Article Source: http://EzineArticles.com/6387100