When it comes to debt, most people are aware of the seven-year statute of limitations. However, not everyone knows how it affects them, their loans, and their credit cards. The Fair Credit Reporting Act allows for listing negative items on someone’s credit report during the seven years. It includes late payments, charged-off accounts, debt collections, and even Chapter 13 bankruptcy. Today, we’ll explore whether you can pursue debt older than seven years.
Seven-Year Statute of Limitations
Essentially, this rule means that debt won’t be visible on a credit report after seven years. If you don’t already know, the credit report is a document that registers payment history, credit, and loan accounts with banks. Some refer to this process as “falling off”, and it typically happens automatically once the debtor’s account hits the seven-year mark. Neither the debtor nor the creditor needs to do anything for this to happen.
On the other hand, the seven-year debt mark doesn’t mean that the debtor no longer owes you that money. Moreover, debt collectors and agents can still come after the debtor, requesting payment. They can do it through phone calls, e-mails, letters, or even wage garnishment if the ruling court allows for such action. Lastly, filing a lawsuit is another option if the state’s statute of limitations exceeds seven years for a certain type of debt.
Is Suing My Only Option?
In most cases, debt collectors suggest filing a lawsuit if the amount owed is large enough, for example, $5,000. Still, that doesn’t mean that you can’t start legal proceedings for less. The sued party will, of course, try to prove that the seven-year period of time has passed and that they don’t owe anything anymore. But if they don’t show up at court, the case is likely going to go in your favor, and they’ll need to pay the debt.
Such court judgments stay on people’s credit reports for another seven years. They can make it harder for them to get new credit, as they’re likely to be seen as unreliable by banks or other financial institutions.
Furthermore, you can pursue your debt by seeking information on the indebted party’s workplace. If it’s possible, the court will order wage garnishment or even account freezing, but that’s a long shot.
Can a Seven-Year Period Start Again?
It’s not uncommon for people to think that seven-year periods can start over again. This includes both parties — indebted and owed. However, paying a past due balance won’t restart the time limit of credit reporting, and negative information won’t show up on someone’s bank account. But if individuals that owe money start making payments on that old debt, the statute of limitations will start over once more.
Pursue Your Debts Legally With SWR!
Are you unsure about pursuing an old debt? No worries — contact us at Southwest Recovery Services by phone or e-mail now. Our team of collection agents will do everything in their power to get your money legally for an affordable percentage. We provide services all over Texas (Addison, Dallas, Houston, Austin, and San Antonio) as well as Oklahoma City, Oklahoma, and St. Louis, Missouri. Don’t hesitate and allow your money to slip away.