State statutes of limitations (SOLs) on debt put a limit on the length of time a collector can sue you. If you have a collection within the SOL, and we have a concern, we will flag it and not dispute it without discussing it with you.
How to Calculate your SOL
SOLs are state and debt type specific. Debt types include open-ended accounts, written contracts, promissory notes, and oral agreements. The SOL clock starts with the default date rather than the later charge-off or reporting date. Many state SOLs for open-ended accounts, such as credit card debt, are as short as three years, so the clock-start date may be quite helpful.
Which State Law to Use?
If you reside in a state other than where you lived when you entered into the debt, check both state SOLs. Collectors may apply the one they like best (the longer one!)
Poking the Bear
Many collectors treat disputes as a trigger to intensify their collection efforts or initiate a lawsuit. The age and amount of debt are usually considerations. Regardless of your opinion about the legitimacy of the collection, it is prudent to be clear on your rights before taking action.
A Caveat
Some collectors attempt to sue beyond the SOL. Although your SOL defense would prevail, no one needs the stress. One more reason to treat collections with caution. A little attention at the outset can turn a threat into an advantage.
Using SOL as Leverage
When a debt is beyond the SOL it is often very negotiable. You may need to press your point so the collector knows that you know, but an expired SOL should give you a significant edge in negotiation.