Credit Debt Statute of Limitations - One Form of Debt Relief?

Are you hopelessly in debt and unable to make your payments because of job loss, illness or other factors outside of your control? You might be interested to know that there is such a thing as credit debt statute of limitations on many of your outstanding debts.

This provision provides a legal basis for how long a creditor can continue to pursue you for the outstanding balance of funds owed to him by you. Once that time period has expired, the creditor loses the right to sue you and recover the funds. If you simply cannot pay and are "judgment proof" then letting the clock run out on the loan maybe one form of debt relief besides bankruptcy.

The credit debt statute of limitations varies from State to State and the type of debt you have is a relevant factor in determining the statute length. There are generally four types of debt accounts: 1) Oral contracts 2) Written contracts 3) Promissory notes and 4) Open-ended accounts.

Each State also has its own definition of some of the debt accounts. For example, many States consider credit card debt as an open-ended account while other States consider the debt to be a written contract. An example of a written contract in most States is an auto loan, which is also considered an installment account.

The credit debt statute of limitations deals strictly with the time period in which a creditor has to file suit to recover the monies owed. It does not deal with the creditor's attempt to collect the money from you by selling the account over to a collection agency. Many debt collectors use all kinds of borderline tactics to put pressure on you to make payments on outstanding debt, even if you simply don't have the means to repay the loan.

Because of consumer abuse, the Fair Debt Collection Practices Act binds the creditor, via the collection agency, to certain behavior. This law dictates the practices that a collection agency must adhere to in its attempt to recover the money owed to the creditor. The law was passed in 1978 as a way to eliminate abusive practices in the collection of consumer debts and to give redress to consumers who were being abused.

Contact the State Attorney in your particular State (www.naag.org) to determine the credit debt statute of limitations on the type of debt account that you have. Also, in most States the statute begins to run at the time of your last payment on the debt. This is important because if you have not paid on the debt for 4 or 5 years the time limitations may be ready to expire. Any further payment on the account may reset the clock.

To learn more about credit debt statute of limitations and learn things related to credit repair, from an expert in the field, please visit: Credit Repair Service.