The Statute of Limitations

The Statute of Limitations

The Statute of Limitations

When it comes to debts and debt collectors, not all debts are created equal. There are specific terms and agreements that come with each and every individual debt. These vary according to the type of contract that is agreed upon in the first place. The length of time that debt collectors have in which to collect the debt they feel is owed to them is also specific to the type of contract in many cases. Many consumers automatically pay debts they find on their credit reports not realizing that some of these debts have surpassed the statute of limitations.

The statue of limitations on credit accounts will vary from state to state as well as from types of contracts. There are four typical types of contract agreements made:

1. Written Contracts these contracts are typically written with very specific terms for the payback of the loan in question. With all of the details spelled out carefully in writing, written contracts are then signed by both the lender and the borrower. These are binding contracts and enforceable via the court system if need be.

2. Oral Contracts oral or verbal contracts are likened to those sealed with a handshake types of agreements. While these are, in fact, legally binding contracts they are also very difficult to enforce in court.

3. Open-Ended Accounts these accounts are those with a revolving credit line with variable balances. This type of account includes store charge cards and credit cards as well as the less popular bank credit lines.

4. Promissory Notes this are much like written contracts in that the details are spelled out in writing and signed by both parties. The difference is that even the payments are scheduled clearly as well as any interest is also put in writing.

It is important for consumers to consult an attorney if they find accounts on their credit reports that have surpassed the statute of limitations. Many consumers automatically assume that because an account is showing up on the credit report that it is a valid debt they must pay. The attorney's office can help clarify those details and possibly save clients money and headache in the process. Each state has a specific statute of limitations that can range from three to ten years and still depends on the type of contract involved. Lawyers working in individual states will be able to help with the details and see that their clients find a fair solution.

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