How Soon Does the Statute of Limitations Expire?

Legal experts may disagree on the exact beginning date of the statute of limitations for an old debt from time to time. Some people think it starts when you miss your first payment on an account. Others contend that the statute of limitations doesn’t begin until you get a formal demand for payment in full from a credit card company or debt collection agency.

These factors will mostly be determined by the agreement that was in place at the time the account was established. You can ascertain when your statute of limitations has started if you understand the sort of arrangement you are in and have access to the contract that has been placed in place. Here is a comparison of the two options:

1. The first late payment or default date

If your failure to pay your debts occurs within the stated statute of limitations term, your creditors may have what is known as a “cause of action.” Most states start their statutes of limitations when a sufficient number of causes of action have accrued.

The typical sign of this is when a customer ignores their account and accrues missing or late payments. The creditor or debt collection agency may file a lawsuit to recover the debt before the statute of limitations expires.

2. The First Written Notice Date

There may be an acceleration clause in some loan agreements. Prior to bringing legal action, a creditor must activate this provision. The acceleration clause is often triggered when a creditor gives you a formal notice requesting that a sum be paid in full by a specific date.

This kind of activity might be regarded as the statute of limitations official beginning date. However, depending on the type of agreement, some people believe the statute of limitations to have started running on the day the first payment was missed.

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