Statute of Limitations on Deb1

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					                             Statute of Limitations on Debt

The very thought of paying heaps of debts to numerous creditors is like a nightmare to any
debtor, who losses his sleep and peace of mind over paying off the high amount of debts,
regardless of various debt relief options like debt consolidation, debt settlement, credit
counseling etc. However, over a long period of time, a debt may reach its deadline of expiry
date, after which a debtor is no more obligated to pay the amount to its creditors. This
particular date of expiration is called Statute of Limitations, which prevents the debt
collector from pursuing it indefinitely. Thus for any debtor it is necessary to first confirm
that the Statute of Limitations on debt is not over, and if it has, it implies that he does not
have any liability to pay it off. The Statute of Limitations on debt collection varies from state
to state, depending upon its amount of time, after which the debt is no more enforceable by
the collectors or creditors. Many debtors are still unaware of the fact that Statute of
Limitations on a debt exists to protect their payment rights.

The time frame of SOL varies from something between 3 years to 20 years, depending upon
particular state norms and debt collection laws. The date of first delinquency or the starting
date from where the SOL begins is 180 days after an individual misses the first payment of
a debt. The basic SOL on a debt is around 4 years. A debtor should consult his state’s SOL
chart to determine the time period of a debt in his state of residence and he should not
confuse SOL with credit reporting time limit which is determined by Fair Credit Reporting Act
and has got nothing to do with SOL. The kinds of debts that are covered by the SOL are:
Credit Card Debt, Medical Debt, Lines of Credit, Unsecured personal loans, deficiency
balances, Payday loans, and other forms of unsecured debt. However there are certain
debts to which SOL does not apply like: Judgments, Bankruptcies, Tax Liens, Car
repossessions, Foreclosures and Secured Loans.

A collection agency can trap a debtor to pay for an expired debt by filing a lawsuit. But it is
the debtor who has to bring the SOL on the debt, to the court’s attention to escape the
payment. Thus it is always advisable for a debtor to appear in court for facing a lawsuit
from his creditor, as the debtor’s non-response would let the creditor have a default
judgment, which will result in wage garnishment for the debtor. A debtor should therefore
respond to the court’s summons to bring the SOL on the particular debt to the court’s notice
to eventually nullify the lawsuit.

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