Debt Collection Statute of Limitations

What Does “Debt Collection Statute of Limitations” Mean and Why is it Critical for You to Understand How It Works?

Debt-Collection-Statute-Of-Limitation Debt Collection Statute of Limitations refers to the time frame in which a debt collector or debt buyer can legally sue a consumer debtor in an attempt to collect on the alleged debt that the debt collector owns.  Each state sets their own Debt Collection Statute of Limitations time period.  (See list of debt collection statute of limitations for each state listed at the end of this article.)

There are different statute of limitations time periods for different kinds of debt.  Since the biggest debt that consumers have in this country is credit card debt we will only discuss Credit Card Debt Collection Statute of Limitations time periods in this article.

The Federal Truth in Lending Act defines Credit card debt as an “Open Account”.  If you do any research on the statute of limitations laws for credit card debt in your state you probably won’t find any information specifically referring to credit card debt statute of limitations.  Most state laws concerning the statute of limitations don’t refer to credit card debt or credit card agreements in their discussions about debt collector statute of limitations.  Instead they refer to open-ended or revolving credit accounts.  These two types of accounts are the categories that credit card debt falls into.  Credit card debt is defined as an “open account” for the purpose of our Statute of Limitations (SOL) discussion.

When Does the Credit Card Debt Collection Statute of Limitations Start?

The time clock starts on the day after the due date of your last missed payment on your account.  i.e. If your credit card payment is due on January 30th, 2008 and you decide to not make any more payments on your credit card account then the statute of limitations time clock starts on Feb. 1, 2008.  One day after the due date.

The statute begins to run from the day that you have done something contrary to the terms of your credit card agreement for which you can be sued. The day that you stop making payments, that “something” is failure to pay your bill.  When you don’t make your payment on time, you have legally violated the terms of your agreement and you have given the credit card company and or the owner of the credit card debt a cause of action against you.

i.e. In California the Debt Collection Statute of Limitations on credit card debt is 4 years.  If you decided to stop making any more payments on your credit card account in January of 2008 and the due date for your payment was January 30th, 2008 then the time clock for the 4 year bill collector statute of limitations begins on Feb. 1, 2008 and runs to Feb. 29th, 2012 four years later.  After Feb. 29, 2012 this particular debt is considered to be time barred.

Does the Debt Collection Statute of Limitations Prevent You From Being Sued on Time Barred Debt?

A very important rule of thumb when it comes to dealing with debt collectors is to NEVER EVER speak to them on the phone.  If you get sucked in by a debt collector to make a payment to them on an old debt or even a time barred debt then the time clock for the debt collector statute of limitations starts all over again.  This practice is known as “Re-Aging Debt”.

Consumers need to know that if they get talked into making a payment (no matter how small) to a debt collector as a way to get them off your back then the time clock for the debt collector statute of limitations starts all over again.  In fact, simply speaking with them and acknowledging an old debt as being yours can inadvertently reset the clock on the debt collector statute of limitations under certain circumstances.  NEVER SPEAK WITH A DEBT COLLECTOR!

Note: If you receive a demand for payment on a debt and or start getting calls from a debt collector you need to know how to respond to their demand letter and you need to know that you MUST NOT talk to them on the phone.  If you talk to them on the phone and acknowledge the debt you could inadvertently reset the clock on the debt collector statute of limitations.

For more information on how to respond properly to a demand for payment letter from a debt collector you should get your hands on the “Bill Collector Termination Letter Package”.  This package will not only stop them from harassing you it will prevent credit card lawsuits and or help you get a lawsuit dismissed even if the debt collection statute of limitations has not come into effect.  If you fail to respond to their lawsuit and or fail to respond properly they will win by default.  Knowledge is power if you use it.

After the Debt Collection Statute of Limitations expires the debt is referred to as, “Time-Barred Debt”.  This means that a debt collector can no longer sue a consumer in an attempt to collect the time barred debt and win the lawsuit.  They can still legally call the consumer in an attempt to collect time barred debt but they can no longer legally file a lawsuit to collect the debt and win the lawsuit if you answer the complaint properly.

“They Cannot Win The Lawsuit If You Answer the Complaint PROPERLY” — You Must List an Affirmative Defense of Time Barred Debt Under the Statute of Limitations.

This is very important.  If you spend hours reading information on the Internet concerning time barred debt every one of these sites tell you that the debt collector can not sue you on time barred debt.  This is very misleading.  They can still sue you and win the lawsuit if you don’t “properly respond” to their lawsuit.

If they file a lawsuit on time barred debt the consumer can get the lawsuit dismissed if they respond to the lawsuit properly.  In order to get a time barred debt lawsuit dismissed you have to file a timely and proper response to the lawsuit that denies all of the allegations and includes an affirmative defense of “Statute of Limitations”.

If you do not include an affirmative defense of “Debt Collections Statute of Limitations” in your answer to the complaint you cannot get the case dismissed using that as your defense if the case were to go to a summary judgment motion and or to a trial.  You MUST list it as an affirmative defense in your answer to the complaint otherwise the judge cannot accept it as your defense.  If you don’t list this affirmative defense in your answer to the complaint then you will lose the case even though technically the debt was time barred.

IMPORTANT: If you get served a lawsuit and you know that the debt is time barred DON’T IGNORE THE LAWSUIT.

You MUST file a proper response to the lawsuit in order to use the debt collection statute of limitations defense.  If you don’t file a proper response then you will end up with a judgment against you.  Once the Court has granted a default judgment against you (even on time barred debt) the debt collector can levy your bank account and or garnish your wages.  It’s too late then to dispute the bank levy and or the wage garnishment using the “Debt Collection Statute of Limitations” as your defense.

The only way you can use the “Debt Collection Statute of Limitations” as a defense to get the lawsuit dismissed is to provide it in your answer to the complaint.  It’s also important to understand that you must file your answer to the complaint in the time required by in your States rules of civil procedure.  The time allotted to file your answer to the complaint varies from state to state but usually it is between 20-30 days.  The required time frame to file your response to the complaint will be noted in the summons document that you were served.  If you would like to get access to a sample ‘Answer to the Complaint’ that will properly list a Statute of Limitations affirmative defense please contact us via email: Support at DebtEliminationTools.com  Insert the words, “Debt Collection Statute of Limitations” in the subject line of your email.

State by State Debt Collection Statute of Limitations List:

Alabama – 3 yrs
Alaska – 3 yrs
Arizona – 6 yrs
Arkansas – 5 yrs
California – 4 yrs
Colorado  - 6yrs
Connecticut  - 6 yrs
Delaware – 3 yrs
District of Columbia – 3 yrs
Florida – 5 yrs
Georgia – 4 yrs (State Law is 4 yrs but a Court ruled 6 yrs)
Hawaii – 6 yrs
Idaho – 5 yrs

Illinois – 5 yrs ( State Law is 10 yrs but ILL appeals court ruled 5 yrs)
Indiana – 6 yrs
Iowa – 10
Kansas – 5 yrs
Kentucky – 5 yrs
Louisiana – 3 yrs
Maine – 6 yrs
Maryland – 3 yrs
Massachusetts – 6 yrs
Michigan – 6 yrs
Minnesota – 6 yrs
Mississippi – 3 yrs
Missouri – 5 yrs

Montana – 8 yrs
Nebraska – 4 yrs
Nevada – 4 yrs
New Hampshire – 3 yrs
New Jersey – 6 yrs
New Mexico – 4 yrs
New York State – 6 yrs
North Carolina – 3 yrs
North Dakota – 6 yrs
Ohio – 6 yrs
Oklahoma – 5 yrs
Oregon – 6 yrs
Pennsylvania – 4 yrs

Rhode Island – 10 yrs
South Carolina – 3 yrs
South Dakota – 6 yrs
Tennessee – 6 yrs
Texas – 4 yrs
Utah – 4 yrs
Vermont – 6 yrs
Virginia – 3 yrs
Washington – 6 yrs
West Virginia – 10 yrs
Wisconsin – 6 yrs
Wyoming – 8 yrs

If you have any questions concerning the Debt Collection Statute of Limitations please feel free to email us.


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