Statute of Limitations on Debt #credit #card #debt #consolidation



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Statute of Limitations on Debt

If debt is causing you distress, consult with a Bills.com debt relief partner to get no-cost advice about your debt resolution options.

The statute of limitations listed below concern breach of contract. This is the legal reason a creditor must use to file a lawsuit against a delinquent borrower. Statutes of limitation vary by debt type. A statute of limitations clock usually starts the moment a borrower becomes delinquent on a debt. The clock can be paused if the debtor leaves the country or even the state, depending on state law.

An expired statute of limitations clock does not mean the original creditor is stopped from filing a lawsuit against a delinquent debtor. (An exception to this rule applies to Mississippi and Wisconsin residents.) An expired statute of limitations gives a borrower an affirmative defense he or she can use as a shield to stop a lawsuit. A borrower must inform the court the statute of limitations defense applies — a court will not raise this issue on its own.

Some Internet commentators simplify statute of limitations rules to a phrase like, “An original creditor can’t sue you if the statute of limitations has passed.” This is a false interpretation of the law in all but two states. However, courts have decided the FDCPA bars collection agents from suing consumers for expired debt.

Some creditors file lawsuits against delinquent borrowers even though the statute of limitations clock expired. Creditor do so because, unfortunately, many consumers do not understand their rights or hope if they ignore a notice of a lawsuit (called a summons and complaint ) it will go away. Consult with a lawyer in your state immediately if you receive a notice of a lawsuit. You must file an answer to the complaint or you will lose by default.

Read the Bills.com article What Is a Statute of Limitation? to learn more, including which statute of limitations applies to your situation.

You might wonder what other state laws apply to you. To learn more about your state’s rules for wage garnishment and related exemptions, see the Bills.com Collection Laws & Exemptions by State page.

You mentioned being surprised by this judgment. Your experience is not unique. Consult with a lawyer in your state who has consumer law experience. Discuss filing a motion to dismiss based on an ineffective service of process.


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