The debt collection statute of limitations refers to the length of time collection agencies can continue to legally pursue past due debts. This effectively means that unpaid debts do have an expiration date, after which time debt collection agencies are no longer able to pursue for payment.
The period of time that may elapse for collecting a debt differs from state to state, but it shouldnt be confused with the credit reporting time limit. These are distinctly separate and different issues.
Time Period For Debt Collection Statute Of Limitations
Keep in mind that the debt collection statute of limitations time period commences from the date of the last reported activity on the account. This date is shown on your credit report. This is a completely different date from the date the account became overdue.
Account activity can include making a payment, entering a payment arrangement or agreement, and even promising to make a payment.
For example, should a customer elect to make a partial payment, this can effectively reset the time frame back to zero on the day payment is made. Debtors who intend to avoid paying their bills altogether may avoid making any contact whatsoever. These delinquent customers know that by letting the debt collection statute of limitations clock run out, then the window of opportunity for collecting the debt has passed.
How Can The Debt Collection Statute Of Limitations Help Businesses?
Once business owners understand a little about how the debt collection statute of limitations can work, they can begin to use the rules in their own favor to help collection strategies.
Understanding that encouraging delinquent clients to make partial payments or even enter into payment agreements can begin the statute of limitations time frame over again from zero can be a way to increase the amount of time you have to collect overdue debts.
This can prove to be a catalyst for business owners to take action and rethink their delinquent accounts. When it is known that you have a limited time period to collect unpaid debts, you may review and reconsider your debt collection strategies. You might even opt to hire an outside collection agency to help with recouping your debts sooner rather than later.
What Is Covered by The Debt Collection Statute Of Limitations?
Excluded debts not covered under the debt collection statute of limitations include federal and state income taxes, child support, and federal student loans. Regardless of the amount of time that has passed, there is no expiration date to prevent collecting these types of accounts.
However, most other types of credit agreements are covered. If youre in any doubt about how the debt collection statute of limitations may affect your own debt collection strategies then its important that you contact third party collection agencies to help you navigate through your rights. - 31979
The period of time that may elapse for collecting a debt differs from state to state, but it shouldnt be confused with the credit reporting time limit. These are distinctly separate and different issues.
Time Period For Debt Collection Statute Of Limitations
Keep in mind that the debt collection statute of limitations time period commences from the date of the last reported activity on the account. This date is shown on your credit report. This is a completely different date from the date the account became overdue.
Account activity can include making a payment, entering a payment arrangement or agreement, and even promising to make a payment.
For example, should a customer elect to make a partial payment, this can effectively reset the time frame back to zero on the day payment is made. Debtors who intend to avoid paying their bills altogether may avoid making any contact whatsoever. These delinquent customers know that by letting the debt collection statute of limitations clock run out, then the window of opportunity for collecting the debt has passed.
How Can The Debt Collection Statute Of Limitations Help Businesses?
Once business owners understand a little about how the debt collection statute of limitations can work, they can begin to use the rules in their own favor to help collection strategies.
Understanding that encouraging delinquent clients to make partial payments or even enter into payment agreements can begin the statute of limitations time frame over again from zero can be a way to increase the amount of time you have to collect overdue debts.
This can prove to be a catalyst for business owners to take action and rethink their delinquent accounts. When it is known that you have a limited time period to collect unpaid debts, you may review and reconsider your debt collection strategies. You might even opt to hire an outside collection agency to help with recouping your debts sooner rather than later.
What Is Covered by The Debt Collection Statute Of Limitations?
Excluded debts not covered under the debt collection statute of limitations include federal and state income taxes, child support, and federal student loans. Regardless of the amount of time that has passed, there is no expiration date to prevent collecting these types of accounts.
However, most other types of credit agreements are covered. If youre in any doubt about how the debt collection statute of limitations may affect your own debt collection strategies then its important that you contact third party collection agencies to help you navigate through your rights. - 31979
About the Author:
David Montana is a recognized expert, consultant, author, and a veteran for thirty years in commercial collection agencies services. David also provides additional helpful tips and tools about debt collection statute of limitations.
