Debt Collection Laws: Statue of Limitations Explained

Debt Collection Laws: Statue of Limitations Explained

Many debtors facing credit card debt lawsuits are largely unfamiliar with debt collection laws in their state, which is unfortunate since one can build his or her defense and quite possibly, win the lawsuit if he or she takes time to review their states’ local debt collection laws.

One such debt collection laws include the Statute of Limitations. Statute of limitations refers to the period where a debtor cannot be sued for a certain debt because it is time-barred. The statute clock starts ticking from the DOLA or the date of the last payment on the account. The DOLA could be a partial payment, or any payments made to the original creditor, a collection agency, etc.

For example, say, you made your last payment on a credit card in June 2004 and the statute of limitations on open-ended credit card accounts in your state is six years. This means that your debt will be out of statutes by June of 2010.

Now, this does not mean the creditor will stop its collection efforts by June of 2010. It means your creditor can no longer sue you for the said debt after June 2010. If your creditor stopped suing you for the debt yet remains active in calling you or the people around you to collect the debt, you can put a stop to this by filing a Cease and Desist letter.

For many debt collecting agencies, the minor details are often overlooked and very few debtors take a chance to review debt collection laws to defend themselves. Note that each state has their own statutes on debts and to know more about statute of limitations in your state, you can reach your State’s Attorney General’s office and know more. A simple search online is also a great way to obtain all the information you need about debt collection laws.

Get the best guide to help you fight for your rights and win your case. Learn more about debt collection laws and answering a summons the right way by clicking here.

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