Wednesday, November 30, 2016

How Long Do Creditors Have To Collect Debts?

It might seem like some things never end, especially when those things are not fun or cause you anxiety. One of the most common causes of stress among Americans is debt. Most of us have more debt than we can repay, and it only grows every day. If you have been working with a creditor to come to a result on how to repay a past due debt, you are probably wondering if you will ever pay off the loan and if not, how long the lender will continue to pester you for payments. It seems only fair that at some point, a debt has to die, and the creditor has to write it off and stop collection efforts.

One way a lender will stop trying to collect a debt is if you file for bankruptcy. When a bankruptcy case is filed and a discharge is entered, the debt is no longer due. But what if you haven’t filed bankruptcy or you have taken out new debt after your bankruptcy case was over? What happens to those debts, and how long do creditors have to collect what is due? The answer can be found by looking at the relevant statute of limitations. A statute of limitations is a timeframe under which legal action must be taken, and if it is not then it cannot. A good example is a car accident, where the injured person only has a certain amount of time to file a lawsuit against the negligent driver. If a lawsuit is not filed by the time the statute of limitations expires, the Courts do not allow one to be filed later. The statute of limitations for debt collection varies, depending on the type of contract and type of loan. But be careful, because regardless of the time line, there are some things you may be doing unwittingly that will start the clock running new. These include:

         Making voluntary payments on a debt when asked to do so by the lender.
         If you used a credit card outside of the limitations time, that use will trip the statute and the time will start running from the date of last use.
         Sometimes a promise to pay will start the clock, so be careful about what types of conversations you have with your lenders or a collector.
One of the first things to look at if you have been sued for a past due debt is whether the lawsuit was filed within the statute of limitations. If it has not been, you can ask the Court to dismiss the suit and upon dismissal expect that the lender will no longer bother you. If you are being asked to pay a debt you believe is not legally due, according to the statute of limitations, call our office today for more information. We will look at the facts or your case, and take whatever action is needed to help you.

For more information about statutes of limitation, call us today or reach us online at We offer appointments at multiple locations for your convenience and can schedule a time to visit with you today.

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