There is a statute of limitations on collecting debt. After the statute of limitations has passed debt collectors are no longer allowed to sue you for your remaining balance. There are different types of agreements in each state and each has varying limitations. The different types of agreements are classified as open-ended debt, written contracts, promissory notes, and oral contracts. Once you've identified whether or not the statutes of limitations has expired you will be able to start your credit repair journey.
Open Ended Contract
Definition
A loan that does not have a definite end date, credit line accounts, revolving credit, retail credit.
Further Clarification
Written Contracts
Definition
An acceptance of terms on a document by a written signature by both parties.
Further Clarification
Promissory Notes
Definition
A written agreement between two parties to pay back an amount plus interest. A promissory note must include the amount to be paid, who pays it, interest terms, and the timeframe of repayment.
Further Clarification
Oral Contracts
Definition
A valid oral contract must include an offer, acceptance, consideration, and a meeting of the minds (clear explanation of terms).
Further Clarification
Some important things to remember is that the statute of limitation time frame begins on the date of the last activity which occurred on the account. The statute of limitations prevents creditors from taking the borrower to court for a judgement against the debt.
Once you have identified the type of agreement with the statute of limitation that applies to your state, you will be able to submit a dispute to have the charges removed from your credit report.