Statute of Limitations on the Collection of Certain Debt

As is the case with most lawsuits, there is a time limitation creditors have for seeking payment of unpaid debt. If a creditor has taken too long to file suit against you for the unpaid debt, that creditor may be forever barred from collecting the unpaid debt from you. While this can certainly be a good thing, there are situations where a statute of limitations period might start over if certain action is taken. As such, regardless of how old your debt is, it is essential to make sure you are taking the proper steps to eliminate your debt through bankruptcy or another means of debt elimination with the assistance of a qualified attorney.

The statute of limitations that may bar creditors from collecting old debt varies from state to state. Some states have laws that are more favorable to creditors who may have a substantial amount of time to seek payment from you by filing a lawsuit. Many consumers are not aware that a statute of limitations period exists, and oftentimes creditors are successful in collecting old debts regardless of whether or not the time-period for suing the debtor has passed. For this reason, it is imperative that you seek the advice of an attorney who can ensure you are utilizing a statute of limitations defense to bar a creditor from collecting an old debt if a creditor has sued you to recover this debt. Given that creditors are very aggressive, it is always a good idea to have legal representation to help you with all of your financial concerns and prevent or stop creditors from harassing you.

Open-End v. Closed-End Account

When utilizing your state’s statute of limitations period to defend against a creditor’s attempt to collect an old debt, you will need to know what type of debt is at issue and when the debt was originally due. If the debt arises from an open-end credit account, such as a credit card, the statute of limitations period will likely be different than if a debt arises from a closed-end account, such as a home loan. The difference between these types of credit accounts is that closed-end credit involves one transaction, while open-end credit involves multiple transactions, as consumers typically use credit card accounts on a regular basis, and the terms of payment may change as the balance on the account changes.
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If the account is open-end, then the statute of limitations period begins to run when the first payment is due. If the account is closed-end, the statute of limitations period begins to run on the date the contract regarding the account was breached. For example, if you fail to make a mortgage payment in accordance with the written mortgage loan contract, the date you missed your payment may be used as the start date for when the statute of limitations period begins to run. The creditor then has a certain period of time to collect any unpaid debt from you.

If the statute of limitations period has already passed and the creditor has not taken any action to collect the debt, then you will not be responsible for paying that old debt. However, there are exceptions to every rule, so to be sure that you have accurate information that pertains to your individual financial situation, you should speak with an experienced Bankruptcy Attorney who can lead you in the right direction and help you reach your debt-elimination goals.

Contact The Law Offices of Georgette Miller and Associates, P.C. Today

If you are considering bankruptcy as a means of eliminating your debt, it is essential that you consult with a highly skilled Bankruptcy Attorney as soon as possible. Depending on how old your debt is, it may be too late for creditors to collect unpaid debt from you. The attorneys of the Law Offices of Georgette Miller and Associates, P.C. can provide you with a thorough financial evaluation that will help you make the decisions that will maximize your ability to eliminate your debt. With offices in Philadelphia, PA, New York, New Jersey, Washington, D.C., and Baltimore, M.D., our attorneys are able to help a wide range of individuals and businesses. To discuss your debt-elimination options with one of our attorneys, contact the Law Offices of Georgette Miller and Associates, P.C. today to schedule your initial consultation by calling (866) 96-GMLAW.