FAQ: How long can you legally be chased for a debt?

There is no doubt, having to deal with debt collectors can be a frighteningly daunting experience. What makes it more harrowing is if the collectors manage to find out where you live, where you work, or where you travel to spend your holidays within the country, like Thanksgiving. 

Unbeknownst to many, there are plenty of myths and misinformation floating around pertaining debt collection, how you can deal with them, and everything the debt collector can or cannot legally do to collect their debts. 

As more and more time passes, it is safe to assume that you might feel a bit safer knowing that debt collectors will not chase you around and that your debt will disappear. However, it is essential to understand that debt does not vanish just because you hide from it. 

Sure, it is quite possible that your creditors will cease to contact you. However, that does not mean they can’t resume their collection efforts anytime they want. 

Debt collection – what is the statute of limitation on collecting debts?

When it comes to commercial recovery services and the time limit debt collectors have to collect their payment, there are different rules per state. However, the maximum statute of limitation on debt collection is 15 years.

But each state has a different number. Moreover, the debt collection also depends on the type of contract linked with your debt. There are four main contract-types that you can use to incur debt:

  • Making an oral contract
  • Making a written contract
  • Issuing promissory notes
  • Having an open-end account – (a line of credit)

However, most consumers have to worry about two types of contacts – written contracts, for example, loans, and open-end accounts such as credit cards. To get the best idea about the time limit for debt collection in your state, this table posted by Bankrate will come in handy.  

Tread lightly when it comes to resetting the debt collection clock

Things can start to get complicated here. And that is mainly because how the law is worded; for example, specific actions you perform can reset the timer on your debt collection. That means the collection agency will have more time to pursue their debts, prepare to sue you or ask the courts to issue an order that will compel you to pay up via processes such as tax refunds or your wages. 

Depending on which state you reside in, here are three actions you can perform that will rest the clock:

  • The affirmation that the debt is truly yours. For example, if a debt collector calls you up and says that you owe them this much money, and you say that yes you do and that debt is your, the clock on the statute will reset. 
  • If you even pay a small portion of the debt to the collector – the clock will reset
  • If you do not acknowledge or entirely a legal court notice pertaining your suit on the debt, the clock will reset. 

However, what catches debtors off-guard are the first two actions. If a collection agency calls you and says you owe them this much money and you say that yes you do. However, you can’t pay them … well, you have just reset the clock. Now, the debt collectors have more time to pursue you using all sorts of legal means and garnishments to get their money back. 

Lawsuits on debt

In various scenarios, debt collection agencies or creditors can file a lawsuit against you for outstanding amounts. Sure, after a specific amount of time mentioned in the statute of limitations for each state, a debt cannot be enforceable after the statutory period expires. And if you can prove that the debt is not yours or if the time period expires, you can dodge the lawsuit. Even if the debt collectors push you to court, you can use the fact that the statute of limitations on your debt has expired, in your defense. 

However, keep in mind that debt collectors will not stop there, they will resort to other methods, such as having called you up at Christmas or Thanksgiving, intimidating you to pay your debts. And if you lose your composure and say that you can’t pay the debt, you will be loosely acknowledging the fact that the debt is yours, which will as stated earlier, reset the clock. 

Moreover, if the statute of limitations is set to expire, and you are hit by a lawsuit summons, it is an excellent idea to lawyer up and discuss the best plan of action. 

Final Words

Remember, even after the time limit on your debt has expired, debt collectors can use other options such as reporting your past outstanding dues to the credit bureau, that is if the credit reporting time has not expired. In any case, it always wise to consider seeking the help of your attorney to get through these situations. 

Author Bio:

Evie Harrison is a blogger by choice.  She loves to discover the world around her. She likes to share her discoveries, experiences and express herself through her blogs. Find her on Twitter:@iamevieharrison

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