Debt collection is covered by the statute of limitations. The statute of limitations refers to the law that sets a deadline for law suits. For every type of case, the law sets a certain timeframe for people to sue. Normally, the debt collection statute of limitations set the timeframe according to the date of the event’s occurrence. In reference to debt collection, it means that after the designated statute of limitation expires, a collector can no longer sue you. So, if the collector wants to go with legal action, he should start the process before the debt collection statute of limitations expires.
The debt collection statute of limitations is computed according to the last time you made a payment to your debt. For example, you made a payment on May 15, 2008. Six months will be added to that date. It will now be November 15, 2008. Next, add the number of years of the statute of limitations. This will depend on two things – the state where you incurred the debt and the type of agreement you signed for the debt.