When you get into financial trouble with creditors, it can be very confusing trying to sort out all the many terms that get thrown around as you try to get back on your feet. One area where many debtors get confused is the difference between how long a negative item can appear on their credit report and the statute of limitations for the creditor to collect the debt.
Most negative items must be removed from your credit report 7 years after the first date of “uninterrupted delinquency,” which means the bill is at least 180 days past due. Bankruptcies and tax debts are among some of the items that can stay on the report longer.
The statute of limitations is a completely different issue that has nothing to do with credit reporting. This refers to the amount of time a creditor has to take you to court over a debt. The statute of limitations in Arizona for most unsecured debt is six years.
So, if you have a five year old debt on your credit report, you may wonder if it is “worth it” to pay it off. If you pay it, the report will still remain on your credit report as a collection account for another two years, but it will be marked as a PAID collection account, which looks much better to potential lenders.  Of course, once you pay you can’t be taken to court, either.
At The Zolman Law, we believe that your life shouldn’t be defined by debt. We have helped hundreds of people just like you find the relief they deserve from harassing bill collectors, paycheck garnishment, foreclosures proceedings, and – most importantly – the constant worry about money and what to do about your debts.
We are a dedicated debt relief law firm. We help people from Phoenix, Mesa, Gilbert, Queen Creek, Chandler, Scottsdale, Apache Junction, Tempe and throughout Arizona file for bankruptcy or work through tough tax problems every day. We can help stop the debt cycle and give you relief from your overwhelming, burdensome, and crushing debt. Please don’t wait another moment. Call us right away – our attorneys will help get you the fresh start you deserve.