A judgment is a court order to pay a certain amount of money to a lender who has filed a lawsuit against the borrower. Creditor, lenders, debt collectors, or other third-party debt collects can file such lawsuits and if they win the case, a judgment is made against the borrower. Unfortunately, the judgment goes on credit reports and staying on record for ten years from the date the lawsuit was filed. Maintaining a good credit report is necessary in our world, and it is vital borrowers acknowledge and understand their Statute of Limitations of debt in their state when borrowing money from another party.
|Oral Contract||6 years|
|Written Contract||6 years|
|Promissory Note||10 years|
|Open Accounts||6 years|
Statute of Limitations is the amount of time a creditor or third-party debt collector can legally collect on a debt and obtain a judgment against a borrower. Specifically with debt, the Statute of Limitations is the amount of time a creditor can ask the court to force the individual to pay the owed amount of money. Each state has its own Statute of Limitations on debt for specific contracts.
There are four categories of debts. It is important to know where your debt falls under.
An oral agreement is a debt made in an oral contract, simply a verbal agreement to pay back money. Oral agreements are legally binding, however difficult to use as evidence to prove in court.
Another category of debt is written contracts. A written contract consists of terms and conditions of the loan, and is signed by both lender and the borrower.
The third form of debt is a promissory note, a written contract consisting of a specific promise to pay. Promissory notes include terms and regulations, including the interest rate, a set repayment schedule, deadlines, and consequences of default.
Finally, an open-ended account is a type of debt where an account has a revolving balance that can be repaid and borrowed. Credit cards and cell phones are common examples of open-ended debts.
After categorizing your debt, you are able to see the Statute of Limitations on debt in the state of Wisconsin. The limit of time before being sued for a debt for oral agreements, written contracts, and open-ended accounts is 6 years. Promissory notes have a limit of 10 years.
It is important for borrowers to know their state’s laws on Statute of Limitations on debt. Once the time limit based on a contract has expired, the lender can no longer take legal action against the borrower.
Pranjali works for the University Archives at North Carolina State University. She volunteers at Occupational Therapist offices in Charlotte and Raleigh. Pranjali is in the University Scholar’s Program and a member of Psi Chi Honor Fraternity. She is a co-captain of an Indian folk-dance team at NC State.
While she is not busy applying for graduate school, she enjoys working out, traveling, and listening to music. Her interests include fashion, all things French, and spending time with friends and family.
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