How do I calculate the statute of limitation for a collection?
Knowledge of applicable statutes of limitation (SOL) is almost always a key component of credit repair success. With the knowledge of your SOL you can know when your settlement offer is most likely to be accepted, when you can comfortably tell an aggressive collector to get lost, and even when you might be better off hiding.
Avoid Credit Repair Trouble
Conversely, without the knowledge of your SOL you may get yourself in credit repair trouble, attracting unwanted collection and legal activity. As important as it is, it is critical that you calculate the SOL very carefully as there are a few complexities to the process.
When the Clock Starts
First, you need to know that the SOL is the length of time a collector can sue you for a debt. Or, should they sue you after the expiration of the SOL you can get the case overturned by raising the SOL defense. The SOL clock starts with the date of your original default, which is the date of your first missed payment after you stopped paying.
Resetting the SOL Clock
Default dates are not reset by collectors when they purchase a debt, but they can be reset if you enter into a repayment plan, so we always advise our credit repair customers to think twice before making a payment arrangement.
SOL is Not the Reporting Period Limit
To address a common misconception people starting credit repair services often have, the SOL has no bearing on the reporting period limit. The SOL is about the legal leverage the owner of the debt has, whereas the reporting period limit is the length of time the credit bureaus may display derogatory information on your credit report. The SOL is almost always considerably shorter.
Getting the Facts
Your SOL is specific to your state as well as the category of the subject debt; credit cards (open ended contracts), car loans (promissory contracts), etc. In some cases collectors can choose between two SOLs, the SOL for the contract state and the SOL of your current residence so check both and proceed with caution.
Getting Professional Help
It is always advisable to get the opinion of a credit repair professional before deciding to dispute an active collection. If you are a member of our program we will do all of the homework for you and insure that you will not trigger any unexpected legal action. And if you plan to negotiate a debt, the same holds true. We will examine all of the relevant criteria to determine the likely flexibility of the collector. A little homework can save you a lot of money.