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Perhaps the same old familiar bill has been popping back up in your mailbox at increasingly frequent intervals. Perhaps you’ve been dodging phone calls from the same creditors for several years now, only to start blocking new numbers.

In any case, running and hiding from old debt is enough to set anyone on edge, if not evoke anxiety outright.

If you find yourself asking, “Do I need to pay my old debt?” several years after you first started missing payments, we have the answers to all your questions.

Understanding The Statute of Limitations On Debt

Generally speaking, most debts are held to a statute of limitations, which is the legal length of time a creditor may sue you for having missed your payments. Once it reaches the point of expiration, the debt is considered “time-barred.” 

The statute of limitations typically begins when you miss a payment, and the date the debt officially expires varies by — according to the Federal Trade Commission (FTC) — “the type of debt and the law that applies either in the state where you live or the state specified in your credit contract.”

For example, the majority of debts in the state of Florida — from medical debt to credit card debt — involve a statute of limitations lasting approximately five years. Student loan debts, on the other hand, are not subject to a statute of limitations.

You will want to note, however, that while you may not necessarily be able to get sued for the debt, creditors can continue to contact you for time-barred debt collection so long as their attempts are within the legal parameters of The Florida Consumer Collection Practices Act (CCPA), which can be found under Sections 559.55-559.785 of the Florida Statutes.

How This Impacts Your Credit Report

After your debt reaches the expiration date according to your state’s statute of limitations, the record of that debt does not dissolve immediately. Specifically, the debt will likely remain on your credit report for several more years.

“Under the Fair Credit Reporting Act, debts can appear on your credit report generally for seven years and in a few cases, longer than that,” according to the Consumer Financial Protection Bureau (CFPD).

Thus, even if a specific debt crosses the threshold of the statute of limitations, it may still adversely impact your credit history and ability to open new lines of credit in the future.

When The Collectors Won’t Stop Calling

As previously stated, reaching the “time-barred” status of your debt will not necessarily stop the harassment of debt collectors, nor will it erase the negative effects that debt can have on your overall financial health and well-being.

Additionally, if you are facing a high volume or wide variety of old debts that you are struggling to organize or repay, bankruptcy — as opposed to waiting out the various statutes of limitations — may be the opportunity for financial hope you’ve long sought.

Bankruptcy will help you wipe the slate clean and begin rebuilding your credit sooner than you may have initially expected. Plus, you’ll never have to face the process alone when you contact Dolaghan Law to start filing.

Dolaghan Law is available to empower you to work toward a brighter, more stable future. If you’re ready to embark on your journey toward financial renewal, call Dolaghan Law today at (904) 354-4935!

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