consumer debt limitation

Statute of limitations for most consumer debt in the United States

Article Written by : Total Merchants

Time limits to pay back most debt in the United States are governed by the law including the Fair Credit Reporting Act. Length of time for negative debt information to remain on your credit report is one major area that the law applies. As a rule of thumb, most negative debt records can stay on your credit report for seven years according to statute of limitations for most debt. Some negative debt has lesser time horizon but they can still appear on your credit report pass the statute of limitations.

Statute of limitations to collect a delinquent consumer debt such as store credit card debt is four years. Unfortunately, due to the Fair Credit Reporting Act, that delinquent debt can stay in your credit report for seven years impacting your FICO score. This is why it is important to regularly check your credit report. Some state laws may bring a different twist to these time limitations and therefore, it is a good idea to see how local laws may modify time limitations.

Be aware that if you make a payment on a collection debt for any reason, it starts new statute of limitations to collect the entire amount you owe.