Open collection accounts should not be disputed without investigating the statute of limitation (SOL). Not knowing your SOL can be costly. Knowing your SOL provides amazing credit repair benefits.
Avoid Lawsuit Triggers
Disputing open collections without knowledge of the SOL is like driving a car blindfolded. You may get lucky, but you may also hit a telephone pole. If you dispute an open collection that is within the SOL, you may attract unwanted legal action. Some collectors have started treating disputes as triggers for commencement of a lawsuit.
Part of the Sky Blue Credit Repair Service
If you dispute the wrong debt with the wrong collector, you may very well get a visit from a process server in return. Not a happy thing. As part of our credit repair program, we research the SOL for every open collection before disputing. We will not expose our customers to unwanted legal attention.
SOL vs. Reporting Period Limit
The statute of limitation has nothing to do with the length of time a derogatory item can remain on your credit report. This later time frame is known as the reporting period limit and is, with a few exceptions, seven years. The statute of limitation (SOL) is the length of time the collection of a debt can be enforced through the courts, i.e. the length of time a collector can sue you.
SOLs Vary But are Usually Short
SOLs are state and debt type specific, and are mostly far less than seven years. Many state credit card SOLs are set at three years.
Dispute without Concern
When the SOL has passed you can dispute without concern. Some aggressive collectors do attempt to sue after the SOL has expired, but they also know that you can easily overturn their attempt by raising the SOL defense. Most will back down instantly when they see that you know the facts. Worst case, you have to show up at court and raise the SOL defense.
What is That Sound?
There is another great use for knowing your SOL as part of your credit repair effort. Once the SOL has passed, the debt will almost always become extremely negotiable. When you tell the collector that you are aware of the SOL expiration you will probably hear them pause, click their keyboard a few times, and grunt. That is the sound a collector makes when they see their commission fly out the window.
Patience Makes Perfect
If you are patient you should be able to settle your debt for cents on the dollar. And if the collector opts to play hardball you can shut them down altogether by sending a cease communication letter.