Many Americans mistakenly believe that once a debt’s statute of limitations expires, they’re off the hook. However, it’s not quite that simple. There are many factors at play that determine when the statute passes, and you may have inadvertently reset the clock on your debt without even knowing it.
Furthermore, there are other consequences that can continue to play out for years, even if a statute of limitations has truly passed. To be completely sure, you should reach out to experts from the Phenix Group to handle your credit repair on Staten Island and throughout New York or across the US.
What Statute Expirations Really Mean
When all is said and done and the statute of limitations on your debt has truly passed, the entity that you owe the debt to can no longer file a lawsuit against you in an attempt to collect the debt. This does not mean you don’t owe them money, just that they no longer have legal means to come after you. They can still try and contact you and ask for their money.
Secondly, just because the company can no longer sue you for the debt does not mean you are in the clear. The debt will remain on your credit report for up to seven years, and even a single collections account of just a few hundred dollars can be a serious red flag when it comes to calculating your credit score. The larger and more recent the default on the debt is, the more impactful it will be on your credit.
If the debt is legitimate and you have the means to pay it, it may be beneficial to consider doing so. That being said, the US credit rating system is rife with inaccuracies, misreported amounts, and fabricated entries.
All it takes is a mistyped social security number or last name, and you have someone else’s debt affecting your credit report. In these instances, it’s best to reach out to reputable credit repair companies who have attorneys that can resolve these issues quickly.
Is the Date Truly Passed?
First, let’s understand when exactly the statute of limitations has passed. It is typical for courts to consider the date on which you made the last payment to be the day that the clock starts ticking for the company to file a lawsuit against you.
However, there are many things that can cause that clock to reset:
- Making a partial payment
- Acknowledging the debt in writing
- Agreeing to a payment plan
- Making new charges on the account
- Refinancing the debt into a new loan
Lenders and debt collectors will attempt to get people to do any of the above in an effort to reset the clock. Paying even a single dollar of a debt is considered acknowledging the obligation, and the timeline goes back to zero.
Repairing Damaged Credit
If you’ve reached the statute of limitations in New York but the debts are still showing on your credit report, you should contact credit repair specialists such as those at The Phenix Group. Our specialists will work with you to ensure that every inaccurate debt that can be removed is deleted from your credit report.
Many people who pay their bills on time have inaccuracies on their credit reports, and they don’t even know it. While these folks still get approved for loans, they may be paying higher interest rates than they should, potentially costing them thousands of dollars over the life of a loan.
Even if a debt is past the statute of limitations, you should make sure your credit report is accurate, and you shouldn’t do it alone. Contact The Phenix Group today to see how we can help!
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