Thanks for coming to learn about Do It Yourself Debt Settlement! We're here to help you create your own Debt Settlement Plan, save the cost of Debt Settlement Companies AND identify the personal barriers that have made your do it yourself debt settlement plans a failure in the past!
Statutes Of Limitation And Debt Settlement
Statutes of Limitation have a role to play when you create a do it yourself debt settlement plan. Each state has it's own time limit during which a law suit must be brought to enforce a debt. After the time when the account has gone delinquent, creditors have a certain amount of time during which they can file suit in state court. This period starts when the debtor becomes delinquent. The fact that the SOL has "run" (expired) on a particular debt will not necessarily prevent a lawsuit from being filed, but the defendant can have the suit dismissed on this basis.
The Statute Of Limitations only covers lawsuits, and SOL expiration does not affect other types of collection action or reporting of the account to credit bureaus the creditor may choose to make. The creditor or collection agency may theoretically continue with letters and telephone calls forever (although third-party collectors are subject to the "cease and desist" provision of the Fair Debt Collection Practices Act.) However, they will generally put much less effort into collecting "Out-Of-Statute" debts, and may give up easily. Out-Of-Statute debts can still be reported to credit bureaus for the time limits specified in the Fair Credit Reporting Act.
Oral Contract: You agree to pay money loaned to you by someone, but this contract or agreement is verbal (i.e., no written contract, "handshake agreement"). Remember these oral contracts are legal, if tougher to prove in court.
Written Contract: You agree to pay on a loan under the terms written in a document, which you and your debtor have signed. You may wish to have a creditor produce the original note if there is a question.
Promissory Note: You agree to pay on a loan via a written contract. The big difference between a promissory note and a regular written contract is that the scheduled payments and interest on the loan also is spelled out in the promissory note. A mortgage is an example of a promissory note.
Open-ended Accounts: These are revolving lines of credit with varying balances. The best example is a credit card account or revolving credit lines at a department store.
(The numbers on this chart indicate years. They are followed by links to the respective state code reference.)
|
State |
Oral |
Written |
Promissory |
Open-ended Accounts |
State Statute: Open Accounts |
|
AL |
6 |
6 |
6 |
3 |
|
|
AR |
3 |
5 |
5 |
3 |
|
|
AK |
6 |
6 |
3 |
3 |
|
|
AZ |
3 |
6 |
6 |
3 |
|
|
CA |
2 |
4 |
4 |
4 |
|
|
CO |
6 |
6 |
6 |
3 |
|
|
CT |
3 |
6 |
6 |
3 |
|
|
DE |
3 |
3 |
3 |
4 |
|
|
DC |
3 |
3 |
3 |
3 |
|
|
FL |
4 |
5 |
5 |
4 |
|
|
GA |
4 |
6 |
6 |
6 ** |
|
|
HI |
6 |
6 |
6 |
6 |
|
|
IA |
5 |
10 |
5 |
5 |
|
|
ID |
4 |
5 |
5 |
4 |
|
|
IL |
5 |
10 |
10 |
5 |
|
|
IN |
6 |
10 |
10 |
6 |
|
|
KS |
3 |
6 |
5 |
3 |
|
|
KY |
5 |
15 |
15 |
5 |
|
|
LA |
10 |
10 |
10 |
3 |
|
|
ME |
6 |
6 |
6 |
6 |
|
|
MD |
3 |
3 |
6 |
3 |
|
|
MA |
6 |
6 |
6 |
6 |
|
|
MI |
6 |
6 |
6 |
6 |
|
|
MN |
6 |
6 |
6 |
6 |
|
|
MO |
5 |
10 |
10 |
5 |
|
|
MS |
3 |
3 |
3 |
3 |
|
|
MT |
5 |
8 |
8 |
8 |
|
|
NC |
3 |
3 |
5 |
3 |
|
|
ND |
6 |
6 |
6 |
6 |
|
|
NE |
4 |
5 |
5 |
4 |
|
|
NH |
3 |
3 |
6 |
3 |
|
|
NJ |
6 |
6 |
6 |
6 |
|
|
NM |
4 |
6 |
6 |
4 |
|
|
NV |
4 |
6 |
3 |
4 |
|
|
NY |
6 |
6 |
6 |
6 |
|
|
OH |
6 |
15 |
15 |
6 |
|
|
OK |
3 |
5 |
5 |
3 |
|
|
OR |
6 |
6 |
6 |
6 |
|
|
PA |
4 |
4 |
4 |
4 |
|
|
RI |
10 |
5 |
6 |
4 |
|
|
SC |
3 |
3 |
3 |
3 |
|
|
SD |
6 |
6 |
6 |
6 |
|
|
TN |
6 |
6 |
6 |
6 |
|
|
TX |
4 |
4 |
4 |
4 |
|
|
UT |
4 |
6 |
6 |
4 |
|
|
VA |
3 |
5 |
6 |
3 |
|
|
VT |
6 |
6 |
5 |
3 |
|
|
WA |
3 |
6 |
6 |
3 |
|
|
WI |
6 |
6 |
10 |
6 |
|
|
WV |
5 |
10 |
6 |
5 |
|
|
WY |
8 |
10 |
10 |
8 |
** Georgia Court of Appeals came out with a decision on January 24, 2008 in Hill v. American Express that in Georgia the statute of limitations on a credit card is six years after the amount becomes due and payable
Disclaimer: Remember, this information is believed to be correct. Not being attorneys, we recommend you talk to your personal financial advisors on how to apply general principles to your own personal situation. The Statute of Limitation information above is subject to change at any time by an act of the respective state legislatures.
