Are you worried about your existing credit card debt? If so, it’s vital to understand what the phrase “statute of limitations” means in the context of debts. It essentially refers to the period of time within which the debt collector or creditor can recoup the money you owe. Read on to learn more about the statute of limitations and other information related to debt timelines.
What is the Statute of Limitations?
A statute of limitations is the time limit within which you should repay your loan or other debt. This period is typically between three to six years but it could vary depending on state laws. For instance, the statute of limitations for debts in New York is three years but in California, it is typically four years. If a creditor does not file a lawsuit within the allotted time, the debt becomes legally unenforceable.
When Does Debt Become Time-Barred?
There are a few different ways through which debt can become time-barred. One way is if the statute of limitations has expired on the debt. This means that the creditor can no longer legally sue the debtor to collect the debt.
Ways of Dealing with Time-Barred Debt
Debt collectors and creditors may still try to collect time-barred debt. Here is how you can deal with the situation:
Discharge it Through Bankruptcy
The first thing to do when you’re dealing with time-barred debt is to challenge the creditors by letting them know that the debt is no longer valid. However, if the creditor or debt collector does not validate your request, you could consider filing for bankruptcy. Filing for bankruptcy under Chapter 7 can help get rid of the debt. However, it’s also vital to consider other aspects like how the bankruptcy filing will impact your credit score.
Settling for a Lower Amount
It’s essential not to ignore the debt collection attempts made by your creditor or debt collector even if the debt is time-barred since time-barred debt can still affect your credit report. Instead, you can try for debt settlement. This involves settling the debt by paying a lower amount than the debt owed. If the creditor agrees to debt settlement, it’s important to get the agreement in writing regarding the same.
Can You Get Sued for Time-barred Debt?
Debt collectors and creditors do not have the right to threaten you or violate your privacy. If you do get sued for a time-barred debt, you can always prove to the court that the statute of limitations has expired. It’s best to get seek professional legal help if you are being sued for time-barred debt.
Knowing about the Statute of Limitations in detail can be extremely helpful if you have debt. Briteside Solutions can help you gain greater insight into the Statute of Limitations and how it works. Visit our website to learn more.