Statutes Of Limitations For Debts And Judgments

The statute of limitations ("SOL") for debts is the time limit after the debt occurs for the creditor to file a lawsuit to recover the debt. This period starts when the debtor becomes delinquent. When the SOL has passed on a debt the creditor will still be able to file a lawsuit. However, the defendant will be able to have the case

dismissed because the statute was "blown". The Statute Of Limitations only covers legal action. The limitations period expiration does not affect other types of collection action or reporting to credit bureaus.

In collecting a debt, the creditor may theoretically continue with harassing letters and telephone calls for decades. Collection agencies may also keep up with the letters and phone calls, although third-party collectors are subject to the "cease and desist" provision of the Fair Debt Collection Practices Act.

Despite this, creditors and collectors rarely put much effort into collecting debts that have passed the statute of limitations. These debts can still be reported to credit bureaus for the time limits specified in the Fair Credit Reporting Act, regardless if they have been disputed legally. Credit cards and other revolving lines of credit are generally considered Open Accounts. Auto loans and other installment agreements are Written Contracts. Promissory notes are usually mortgages, equity lines of credit, and student loans.

For information for reference on the statues of limitation you can check with your local attorney or give us a call. But again, If you actually plan on filing or defending a lawsuit, you should consult your legal counsel.

After a creditor wins a lawsuit against a debtor and is awarded a judgment by the court, there becomes a time limit on collecting that judgment called the Statute of Limitations ("SOL"). At any time after a lawsuit is won and before the expiration of the SOL, a creditor can collect on an unpaid judgment. However, many states allow judgments to be renewed one or more times, which could substantially extend the enforceability of a judgment, if the creditor is vigilant about the renewals. This can potentially result in a permanent legal obligation until it is paid. Be aware that paying an outstanding judgment can update an account that has long been "written off" by the creditor. Even though the creditor can collect forever, as in Delaware, sometimes it's best to just let the judgment fall by the wayside, off the creditor's radar, and eventually…off your credit report. You might want to consult with an attorney or ask us what the statute of limitations, and the allowable interest that can be charged on the judgment for your state is. Even though there is many examples and templates available to you for defending a lawsuit on your own, If you actually plan on filing or defending a lawsuit, you should consult your legal counsel.


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