Statute of Limitations effect on Credit Reports

[Nancie]

The Statute of limitations for all debts where I live is 4 years. Dose this has any effect on my credit report or credit score?

I have 2 negative items (collection) on my credit report dating 5 years ago, when I lost my job.

One debt was sold to a collection agency that is trying to collect it from me and started reporting it to the credit bureaus. The other one – I’ve never heard from them.

Weren’t the items (or at least on of them) supposed to fall off my report already since they can no longer do anything about it?

[Tracy Winters]

SOL and credit reports

There is no connection at all between the Statue of Limitation and credit Reports.

First – any derogatory item will remain on your credit report for 7.5 Years from the date of first delinquency. This time period cannot be restarted.

Regarding the Statue of Limitation:

1. There are no limits to tax debt, student loan debt, and child support debt.
2. Even if the S.O.L. has passed, that does not mean that you don’t still owe or that the collection agency can’t try to collect it from you. It only means that if you’re sued for the debt, you can use the SOL as an affirmative defense in court.

   What this means is simple. If you are sued for the debt, don’t assume that nothing will happen since the debt is time barred. If you DO NOT show up, the collector will get a default judgment against you and be sure that they will execute that judgment. If you are sued, you need to show up, and tell the judge that the debt is time barred, as it is beyond the S.O.L.

3. Unlike the 7.5 Yrs clock that cannot be undone, the 4 Yrs S.O.L. period can be restarted.

   For example, if they contacted you a year ago to collect the debt and you said something like “I don’t have any money right now“, that could be seen as an admission that the debt is yours, and in some states, that admission could restart the SOL clock.

[John]

They have nothing to do with each other

The Statue of Limitations has to do only with COLLECTIONS, not credit reports.

It’s true that after 4 years (in some states) they can’t do anything about it, but it can remain on tour credit report for up to 7-1/2 Yrs.

BTW, the 7.5 yrs starts from the date of first delinquency. This means that the collection agency can keep reporting it for about 2.5 more years.

[Author]

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