Throughout the United States, the statute of limitations laws limits the amount of time one has to collect a debt from a consumer. This is a timeframe determining the length of time that a creditor can take legal action. For a creditor, knowing how long they have to use the court system to force you to pay a debt can make them aggressively pursue outstanding debts.
The court does not track that statute of limitations. If a creditor takes you to court, it is up to you to prove that your debt has gone beyond the statute of limitations.
Keep in mind, each state defines those limits differently. Therefore, it is important to know the limits of your state, how they apply to your specific debt, and how debt settlement can assist in addressing your debts.
Here are 5 key things to know about the statute of limitations for debts in Florida.
Can a Debt Expire?
While a debt may pass the statute of limitations, that does not mean that you no longer owe the debt. It simply means that your creditor will not be able to get the courts to issue a judgment against you for that debt. Proving that the debt is past the statute of limitations means that you need to show the last time you made a payment or records of communication-related to that debt.
Verifying the Debt
Keep in mind that a creditor is going to do whatever it takes to collect that debt, even if it is past the statute of limitations. Therefore, it is important to have the creditor send information to determine if the debt is yours. As debts get sold from one collector to another, it is possible for details to be transcribed or lost altogether.
What Statute of Limitations Applies to Your Debt?
As mentioned, each state has its statute of limitations, but additionally, each type of debt will likely have a different statute of limitations. Here are the different types of debts and what their statute of limitations is in Florida.
Oral Agreements – Debts made through an oral contract, which is a verbal agreement with nothing in writing. In Florida, this type of debt is limited to 4 years.
Written Contracts – These are debts put in writing and agreed to both you and the creditor. The contract will include the terms of the agreement as well as the repayment schedule. This type of debt has a 5-year statute of limitations.
Promissory Note – Written agreement with payments at a certain interest rate, which is due by a specific date and time. This debt also has a 5-year statute of limitations.
Open-Ended Accounts – These are debts that have a revolving balance, similar to credit cards, in-store credit, and lines of credit. These types of accounts are governed by a 4-year statute of limitations but are also ideal for debt settlement.
How Does Expired Debt Impact My Credit?
Your credit report is made up of a history of your debt, even that debt that might have passed the statute of limitations. That is because the credit reporting time limit is the amount of time that a negative debt can be left on your credit report. This period is defined in the Fair Credit Reporting Act (FCRA) and is generally 7 years for a majority of debts. This timeframe is based on federal law, making it the same across the states.
What Are Your Options?
When it comes to debt, the statute of limitations can only limit the collection options of a creditor, but it does not wipe out your debt. One option to clear a debt from your credit report and stop the collection efforts of a creditor is through debt settlement. This process allows you to settle debts with a creditor, clearing them from your credit report, while ending the cycle of collection efforts.
Working with Effective Legal Debt Solutions, you can find that debt settlement fits your needs. Contact us for a free consultation to discuss your options.
The Effective Legal Debt Solutions team is comprised of caring, seasoned professionals with years of industry knowledge coupled with personal real-life experience of dealing with debt settlement situations that many of our clients are facing today.