What is the Statute of Limitations on Debts?

Limited Time for Creditors to File A Lawsuit

Not a lot are aware that under relevant state laws, there is a time limit within which a creditor or debt collector must start a lawsuit, or the claim to the debt may be “barred.” If you are being sued about a debt that is too old, you probably have a defense to the lawsuit. Seek legal advice from a reliable Vancouver debt defense lawyer to know how to deal with a debt collection agency collecting debts that you believe are past the statute of limitations on debt.

This article is divided into four parts:

• An Overview of the Statute of Limitations on Debt
• What Debt Collectors Can And Cannot Do
• What to Do if You Are Contacted for a Debt that You Do NOT Recognize
• What to Do if You Are Contacted for a Debt that You DO Recognize

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An Overview of the Statute of Limitations on Debt

It is not unlikely for a debtor to, out of nowhere, receive a call from a creditor or collector, asking them to pay off what the latter owed. They may call you or send you a letter demanding repayment following the usual debt collection process, especially if payments are past due dates. However, it is essential to make sure that the debt they are asking you to pay back is not yet past the statute of limitations on debt.

If ever you are sued, it is a good idea to talk to a hands-on Vancouver debt defense attorney as soon as you can. In general, it is the responsibility of the person being sued to point out that the statute of limitations, or the limited time creditors or debt collectors have to file a lawsuit to recover a debt, has already expired. Showing that there has been no activity on the account for several years, for example, could help in your defense.

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What Debt Collectors Can And Cannot Do

In certain states, the statute of limitations is counted after the most recent payment was made, even if it was made during collection. In other places, it automatically begins once you fail to make a required payment or when the loan becomes delinquent. It is essential to remember that even if the statute of limitations has already expired, a court may still award a judgment against you if this statute is not properly raised as a debt defense.

Additionally, debt collectors can generally still ask you to pay back what you owe even after the statute of limitations expires. As long as they are not violating relevant debt collection laws, they are generally ‘allowed’ to ask for repayment, either by calling you or sending you letters. However, if a debt collector is filing or is threatening to file a lawsuit, they may be violating the Fair Debt Collection Practices Act (FDCPA).

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What to Do if You Are Contacted for a Debt that You Do NOT Recognize

Debt collection companies are notorious for attempting to collect debts from the wrong people. Partly because debts are often sold by the original creditor to a third party and possibly resold again, a debt collector’s information will likely be incomplete. If ever you get a call from someone asking you to pay off a debt that you do not recognize, refer to your records and the validation letter to clarify any discrepancy. Doing so will help you determine if you should challenge the debt.

It is essential to be extra careful when you talk with debt collectors. Giving them your bank account and other payment information or simply promising to make a payment may be taken as acceptance of the debt. They have a legal obligation to give you information about the debt they are attempting to collect, so asking for details can help you determine if the debt is yours and, if yes, if it is past its statute of limitations.

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What to Do if You Are Contacted for a Debt that You DO Recognize

If you do recognize the debt, ask the collector two simple questions. “Is the debt time-barred?” And, “When was the date of the last payment?”

While debt collectors are not required to answer the first question, they are required by the Fair Debt Collection Practices Act to do so truthfully. Collect all information relevant to the debt, such as the amount and monthly payments made.

If the collector refuses to answer, ask about the date of the last payment. The clock on the statute of limitations often begins ticking, typically 30 days after the first missed payment. 

Alternatively, it may have started when you took out the debtor when it was marked delinquent. If this will still not be given through the phone, refer to the debt validation letter you must receive within five days after the first contact. This document should include how much is the amount owed, when the date of the last payment is, who the collector is, and how information on the original lender may be requested.

Seek the Help of Vancouver Debt Defense Attorneys Today

You do not have to deal with unfair collectors or debt collection agencies alone. If you have experienced or are experiencing unlawful debt collection practices, or have questions about the statute of limitations on debt, seek legal help to ensure that your legal rights are protected. Northwest Debt Defense Law Firm has extensive experience in providing debt relief for individuals and families.

Contact our Vancouver debt defense law firm and consult with experienced Vancouver debt defense attorneys to help you with your case. Call us today at 866-388-5106.