The Statute of Limitations

What is a Statute of Limitations?

A statute of limitations is a law that says that after a certain amount of time, a debt collector cannot sue a consumer for payment of the debt. The amount of time is state specific and is typically between 4 and 6 years, though it may be longer in some states.

How does the Statute of Limitations Work?

The statute of limitations begins from the date a debt goes into default (or a different date if specified by contract). A typical credit card agreement, for example, will specify that the debt goes into default 1800 days after payment is due but not received. Other debts, such as medical charges, usually default immediately when payment is not made. If a consumer makes even a small payment after the limitation period, the time is reset.

I’ve been sued by a collection agency for an old debt. Can I Use the Statute of Limitations?

If you can prove that your debt is beyond the limitation period, then you will not have to pay. A collector can still file a lawsuit against you, but if the statute of limitations is properly used in court, it can prevent them from winning. In fact, an agency may be in violation of the Fair Debt Collections Practices Act if they sue you when they know your debt is has expired, which can help your case in court.

Contact us today to stop debt collector harassment or if you need more information on the statute of limitations in your state.