Credit Repair Tutorial - Statutes of Limitation Overview - Finance - Credit

Do Your Homework

Collection letters, often familiar to those starting credit repair programs, can be disturbing. But before jumping to a conclusion take a moment to do your homework. Read a good book on the subject. Consider taking an online credit repair tutorial. Collectors make mistakes. A large percentage of collection letters are sent in error, often to the wrong party, or for debts that have already been paid. Many more are sent for debts that are past the statute of limitation (SOL).

The Power of SOL

Debts past the SOL are collectible by definition, but the collector has no real leverage. The SOL is the length of time a collector can sue you. Or more precisely, if they sue you after the expiration of the SOL you can overturn the case by showing expiration of the SOL. In most cases, if you tell a collector that you are aware that a debt is past the SOL they will become very accommodating.

Your Choices

If you are contacted by a collector for a debt that is beyond the SOL you have no cause for fear. Use what you learned about the SOL from your studies or a good credit repair tutorial to gain an edge in negotiating a payoff, or if you are not ready to pay you may choose to utilize another credit repair tool, the cease communication letter, which will put an end to the hassle.

Do the Research

Statutes of limitation have no bearing on reporting period limits and are almost always less than seven years. SOLs are state and debt type specific. You will need to look up your applicable SOL on the Internet. Here also a decent online credit repair tutorial can be helpful.

A Caveat

Be aware that you may need to check SOLs for both your state of residence and the state in which you entered in to the contract. Collectors apply the SOL of your current state of residence for credit card debt. But written contracts, like car loans are different, and allow collectors to choose between your current state of residence and the state of contract, so check both.

Walk With Caution

As a further footnote of caution, collectors have the uncommon ability to be aggressive. When dealing with a collector, be prepared. As a popular credit repair tutorial has noted, they are trained to be assertive and to manipulate your emotions. If you find yourself losing control of the conversation do not be afraid to hang up, regroup and try again another day.

Copyright 2010 James W. Kemish. All Content. All Rights Reserved.