Statute of Limitations..How is it going to protect you?

Each state in the Union has a different Statute of Limitations. Do not get confused regarding the Statute of Limitations in collecting debt versus the seven year period of reporting adverse information on your credit report. South Carolina for example has a three year statute regarding open end debts. These have been categorized as credit card debts, store card debts and gasoline cards. Home mortgages and loans do not fall into this category. This means that the amount you owe will change monthly depending on the activity of the account. This is different than an agreed contract that spells out a monthly payment for an agreed upon time limit. Be very careful to understand that IF you make a payment regardless whether or not you got caught up, the Statute of Limitations is tolled.

There are also statutes of limitations regarding how long a judgement can remain on your credit report. In Florida a judgement is granted for seven years and can be renewed twice for an additional seven years. This means a judgement in Florida can possibly remain on your credit report or be in public records for over twenty years. Please be aware of this. Sometimes a judgement might not be reported on your credit report but a search of legal records might reveal that you have an outstanding judgement against you. This is a severe penalty for now being able to pay a bill and be unaware of the ramifications of the law.

Knowing this, it becomes extremely important to understand medical bills. We address medical bills in another article. Be forewarned however! Do not let medical bills deteriorate to the point that they become a judgement against you. This is financial suicide if you are serious about getting approved for you home mortgage loan.

More and more creditors and collectors are now aware of the laws. Some are well versed and when it is brought to their attention that some accounts are beyond the statute of limitations, they are willing to accept offers. They legally cannot collect. Do they try? Yes indeed they do. They prey on your ignorance of the law. What is your defense if they try and collect on a debt that has survived the statute of limitations? Your defense is the fact that it has PASSED THE TIME LIMITS AND THEREFORE IT IS TIME BARRED from collection.

Do not, and I repeat do not fail to show up in court if you are served a summons from anyone attempting to collect a debt that is time barred. IF YOU FAIL TO SHOW THE PLAINTIFF IS AUTOMATICALLY AWARDED A DEFAULT JUDGEMENT! Just show up and represent yourself and it will be adjudged in your favor.

Now you see the importance of understanding your rights. It is not necessary for any debt to go to the judgement scenario if you use good negotiating skills.

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