Past Due Debts In Your Business? Here's How The Debt Collection Statute of Limitations Can Limit Your Ability To Collect Your Debt.
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The debt collection statute of limitations refers to the length of time collection agencies can continue to legally pursue past due debts. This effectively means that unpaid debts do have an expiration date, after which time debt collection agencies are no longer able to pursue for payment.
The period of time that may elapse for collecting a debt differs from state to state, but it shouldnt be confused with the credit reporting time limit. These are distinctly separate and different issues.
Time Period For Debt Collection Statute Of Limitations
It should be noted that the debt collection statute of limitations time period begins from the date of the last reported activity on the account. This is the date that is indicated on your credit report. Keep in mind that this date differs from the date the account originally became overdue.
Account activity can include making a payment, entering a payment arrangement or agreement, and even promising to make a payment.
This also means that a customer who makes one partial payment can restart the time frame again from zero on the day the payment is made. For customers who intend to avoid paying bills, then there is the option of avoiding making any contact whatsoever. These unscrupulous delinquent customers are aware that by allowing the debt collection statute of limitations time period to elapse, then the window of opportunity to sue for payment of the debt has passed.
How Can The Debt Collection Statute Of Limitations Help Business Owners?
When business owners understand how the debt collection statute of limitations works, they can start to use these rules to their advantage and help in their debt collection strategies.
Being aware that by encouraging late paying customers to make partial payments, payment arrangements or enter into a payment agreement can restart the statute of limitations time clock over again can be a great tool to lengthen the amount of time you have to collect these past due delinquent accounts.
This can prove to be a catalyst for business owners to take action and rethink their delinquent accounts. When it is known that you have a limited time period to collect unpaid debts, you may review and reconsider your debt collection strategies. You might even opt to hire an outside collection agency to help with recouping your debts sooner rather than later.
What Is Covered Under The Debt Collection Statute Of Limitations?
Debts that are excluded under the debt collection statute of limitations include child support, federal student loans, and federal and state income taxes. There is no expiration date that prevent collecting these types of accounts.
However, most other types of credit agreements are covered. If youre in any doubt about how the debt collection statute of limitations may affect your own debt collection strategies then its important that you contact third party collection agencies to help you navigate through your rights.
Article Source: Articlelogy.com
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