Whether you carry a large amount of debt on your credit cards or pay them off each month, it may surprise you to find out that there is a statute of limitations on paying back that debt.

Usually when statute of limitations is spoken about, it is being referred to in criminal terms. State governments have a certain amount of time to bring charges against a person for a criminal act. The statute of limitations on credit card debt is very similar. Credit companies have a certain amount of time to successfully obtain a judgment against you. If they don’t get the judgment, you no longer legally owe the money. The Federal Trade Commission refers to credit card debt as Time-barred Debts.

The amount of time that the credit companies have to obtain a judgment depends entirely on what state you live in. The time varies from three years to over ten years. Once that time is up, the credit company cannot even legally threaten to sue you. Just because they can’t take you to court doesn’t mean they have to stop trying to collect, they may still call or send bills in the mail. Many times when the statute of limitations is nearly up, the financial company will make a last push to collect the monies owed. Any acknowledgment of the debt, like a small payment, can reset the time limit to collect in court back to the beginning.

Just because there is a limited time that companies have to collect from you, doesn’t mean a failure to pay won’t adversely affect your credit rating. Every month your financial obligation is reported to the credit reporting agencies as unpaid, your credit rating takes a hit. In fact, even after the time to collect in court is expired, those reported non-payments can stay on your credit report for seven years.

To find out how long the statute of limitations is where you live, contact your State Attorney General’s Office.

All in all, by researching and then comparing not one but many debit consolidation agencies, you will be able to identify the agency that meet your very specific financial situation, plus the cheapest interest rate the market of debit consolidators is offering. For example, see our last debt management service review: Lower My Bills Review.

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Debt settlement is great if it works. With all of the current problems associated with debt, the housing market problems and the current state of economy, it is not surprising many people are seeking debt settlement service. Debt consolidation companies have been around for a while and currently more and more people are seeking their services. Services include debt counseling, debt consolidation and debt management. All of these services are available based on the fact of whether or not you may pay this back. Many people have started debt management plans only to fail halfway through.

This type of program requires a commitment to solving your financial debt problems and usually only begins when you’ve enough money available to meet the system requirements. Debt settlement is not for everyone and when all else fails, bankruptcy is an option. Although bankruptcy may solve the debt problem, the low marks on the credit file will remain for up to 10 years. This may mean having problems financing just about anything. Your credit score will go down dramatically and it can be hard to even rent an apartment. Because of this many people are opting for debt settlement.

In the past many homeowners relied on their equity in their homes to pay down credit card debt, refinancing or taking a cash out on their homes. 5-10 years ago this worked fine, the housing market was doing well and many people prospered from a solid economy. Today the tables have turned and equity is becoming a thing of the past. Credit cards debts are being ignored, foreclosures are up and a surplus of homes are on the market. Debt restructure is an option for people in financial distress but is only a bandaid for many feeling the financial pinch of the current economy.

To sum up, by researching and then comparing as much debit settlement services, borrowers will be able to select the agency that meet your financial situation properly, moreover, besides the cheaper interest rate the market of debt consolidators is offering. For instance, read our last debt settlement service review: Debt Help 101 Review.

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