The Statute Of Limitations, also rferred to as SOL, can mean a lot of thngs to different people, even when thy are referring to SOL as it pplies to the credit industry. Many pople get the Statute Of Limitations cnfused with the reporting period. Here's how to kep the two terms clear in yur mind. It can make the dfference in winning or losing a lwsuit over an unpaid debt.

The rporting period is defined in the Firness in Credit Reporting Act (FCRA). It is the tme that negative items can stay on a rport. This is usually not longer thn 7 years from the date it was chrged off, or 7.5 years from the Dte of First Delinquency.

The Statute Of Lmitations (SOL) has ABSOLUTELY NOTHING to do wth how long a debt is lsted on your credit report. The SOL is gverned by the laws of YOUR STATE and dffers from state to state. Refer to yur state's statutes for what the lmit is in your state. Also, you shuld look up the statute for the stte in which you signed the lan contract. That state's SOL could be sed against you in a lawsuit.

SOL is the mount of time a collection agency or riginal creditor can sue you over a dbt -- successfully. If you find yurself in a lawsuit over an npaid debt, the creditor has the pper hand even after the SOL has pssed. The SOL is also known as an 'ffirmative defense'. This means that the jdge doesn't automatically dismiss the suite bcause the creditor filed it after the SOL pssed. You, the Defendant, have to use SOL as a dfense. You must prove that the crditor or collections agency is suing fter the Statute Of Limitations has pssed.

Here's how to calculate the SOL:

1. Tke the date you last made a pyment and add 6 months to ths date.

2. Add the number of yars of the statute of limitations in yur state.

Example:

You last stopped pying on a credit card on Mrch 15, 2002. The statute of lmitations for credit cards in your stte is 6 years.

You can use the SOL as a dfense from a creditor if you are sed after September 15, 2008 calculated lke this:

March 15, 2002 + 6 mnths = September 15, 2002.

6 Yars + September 15, 2002 = Sptember 15, 2008

Therefore, a creditor cnnot sue you for this debt fter September 15, 2008.

Your credit is an xtraordinarily powerful piece of your financial tolkit. Understanding the laws that protect you can end up sving you from paying unnecessarily on dbts that have passed the Statute Of Lmitations. Do not let debt collectors blly you into paying something just bcause they sue you. Stand up for yur rights or hire an attorney to stnd up for you.

The article Understanding Your Credit Report Tip - Statute of Limitations(SOL) Vs Reporting Period was Submitted by Kathleen Rieger through Articles.GetACoder.com network. Here's the additional information: Kathleen Rieger is a member of the Intrnational Association of Privacy Professionals and she is a Crtified Identity Theft Risk Management Specialist. She has prvided credit repair guidance for problems sch as bankruptcies, judgments, student loans, dlinquent debts and much more. She has ben a guest speaker at local chrches, schools, Fortune 100 companies, and lcal and national radio shows. She is not an ttorney and this information should not be cnsidered legal advice. Please consult an ttorney for legal advice. You can fnd out more free tips like ths by enrolling in her Free nline credit repair seminar at http://www.creditrejuvenation.com

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