A statute of limitations is a statute in a common law legal system that sets forth the maximum period of time, after certain events, that legal proceedings based on
those events may be initiated.
Why should you care about the Statute Of Limitations if you have a account in collections
A creditor may only bring action for the recovery of debts in accordance with the statute of limitations in the State or Territory in which the debt arose. The statute of limitations on debts for goods and services is generally six years and 3 years in the Northern Territory. This means that a court will not hear an action for payment where a debt is outstanding for more than six years. Legal action on such debts is therefore statute barred.
How does the Statute Of Limitations affect my credit report
Section 2.8 of the Credit Reporting Code of Conduct, issued in accordance with section 18A of the Privacy Act 1988 (Cth), prohibits the listing of statute barred debts with a credit reporting agency. Section 2.8 of the Credit Reporting Code of Conduct provides that a credit provider must not give to a credit reporting agency information about an individual being overdue in making a payment where recovery of the debt by the credit provider is barred by the statute of limitations.