Statute Of Limitations Debt Collection Laws
Help Protect From Abusive Collectors

For most of those in debt, the enforcement of new laws that are considerate towards the plight of debtors is welcome news. One often hears of harassment in the name of debt collection. The statute of limitations debt collection laws are one such step in the right direction that helps debtors who have been a victim of such harassment in the name of debt collection.

The statute of limitations debt collection laws have emerged as a major legal advantage for the debtors to help buffer overzealous creditors, out to get their pound of flesh. This law is an attempt at keeping those creditors at bay who have in some way or the other tried to threaten or harass the debtor.

The particulars of the right, try to guarantee that a creditor can sue or issue warnings to a debtor only after stipulated time as is deemed fit by the law.

Debtor Protections

The law is a protection against any kind of action both legal and otherwise so that the debtor is given enough time to pay back his dues. One might point out that the aim here is protection for those who have every intention of paying but might have been delayed for specific reasons. The law does not seek to provide protection to defaulters in the habit of doing so intentionally.

The time period granted to the debtor as a part of this law is legally known as statute of limitations on debt collection. There are of course variations to the time period. It could differ from one state to another or even from one kind of debt to another. The law also has its own guidelines and considerations under which they can be applied.

For example, the statute of limitations is not applicable in the case of child support grant, federal tax or state tax, and federal student loans. In such cases, the collector has the right to sue the debtor in case he seeks to do so, anytime from the date of nonpayment.

On the other hand, in the case of unsecured debts, the time limit set is quite long; in fact it is generally a gap of four to six years. Similarly in the case of tax liens the gap could be a lien of fifteen years, while in case of bankruptcies the time frame given is that of ten years. On an average it may be said to range from three to fifteen years.

Much of the statute of limitations debt collection law also depends on the date of initiation, which might also differ from one state to another. While in some cases it starts from the same date when the creditor and the debtor sign the deal, in others it starts with the date of payment default. There are cases where it is initiated with the complete freeze of the account receivable.

Learn more information about statute of limitations laws, including individual state laws.

Other Considerations

There is some flexibility to the law too. In case of any kind of transaction or action that has taken place in consideration of the account in between, it could lead to a restart of the process of the statute of limitations on the debt recovery. For example, in some states, if you start the process of paying up again or even make a promise to clear the debt in the near future (by providing a date), then it could lead to the stopping of the statute for the time being at least.

As a part of the good news, the statute of limitations debt collection law is applicable to various circumstances instead of being limited to a few. It is also flexible in the sense that the agreement can be made orally or written as per the wishes of both the parties concerned.

It might also be achieved by a simple oath, or through an open-ended account. The statute covers credit card payments, mortgage loans, equity line of credits, car loans, etc. However in cases of a verbal agreement it is difficult to apply the law and garner protection for the debtor.

It should be noted that the law comes with many conditions. For instance, it cannot stop collectors from pursuing you to pay off your debts. Neither can it rescue you from a poor credit report. While the statute of limitations debt collection is meant to protect debtors, it is certainly isn’t a panacea for non-payers!