Can you explain to me the statute a limitations?
The statute of limitations is defined in length of time by the State in which you reside or in which the loan originated.
A key factor here is the DLA – the date of last activity. The date of last activity is one month and one day from the date of your last payment. The benefit of the statute of limitations: they can no longer sue you legally. They can, however, still attempt to collect on that debt. They can still sell that debt to another debt collector who can then attempt to collect. It has nothing to do with how long it is on a credit report – which is seven years. If you make a payment after the statute of limitations or after the date of last activity, in some states it can reactivate the time frame. That’s why I advise never to do that – even one dollar!
Debt collectors have been known to attempt lawsuits after the statute of limitations has run out and win. How? The debt collector sues and the respondent does not show up to court and the claimant, the debt collector, wins by default. No, I am not an attorney but do know about the subject.
If the statute of limitations is six years in the state in which you live and the collector or original creditor attempts to collect on this debt after the six year period, they cannot sue you for it.
Let’s say you have a debt you owed Bank of America in which you made the last payment September 1, 2011. Assume for this argument that they sell the debt to Midland Credit Management on July 23, 2014. So now Midland Credit Management owns the debt. MCM now has until October 1, 2017 to sue you. It does not matter how much you owe. Once it gets beyond October 1, 2017, legally they cannot sue you.
That is a simplistic look at the statute of limitations. You should find out from your states attorney’s general office just how long the statute of limitations is.