Definition
The statute of limitations on debt refers to the limited legal time period during which a creditor or debt collector can file a lawsuit against you to collect a debt. Once this time period expires, the debt becomes 'time-barred,' meaning you still legally owe the money, but the creditor can no longer successfully sue you to collect it. The statute of limitations varies by state and by type of debt, typically ranging from 3 to 10 years. It generally begins from the date of your last payment or the date you last acknowledged the debt. Importantly, certain actions can restart the clock on the statute of limitations, including making a payment, acknowledging the debt as yours, or making a promise to pay.
Frequently Asked Questions
Can a debt collector still contact me after the statute of limitations expires?
Yes, debt collectors can still legally attempt to collect a debt after the statute of limitations expires. The debt still exists, and while they cannot sue you successfully, they can call, send letters, or otherwise try to persuade you to pay. However, under the Fair Debt Collection Practices Act, they cannot threaten to sue you or misrepresent their ability to take legal action on a time-barred debt.
What actions can restart the statute of limitations on a debt?
Actions that typically restart the statute of limitations include: (1) Making any payment, even a small one; (2) Acknowledging that you owe the debt; (3) Promising to pay the debt; (4) Entering into a payment plan; or (5) Making a new charge on the account (for credit cards). This is why it's important to be careful in communications with debt collectors for old debts—even saying 'this is my debt' could potentially restart the clock in some jurisdictions.
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