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When is a debt too old to collect?

If a debt collector intends to sue you to collect on a debt, there is a period of time the law allows for the debt collector to do so, otherwise, you will have an absolute legal defense to the claim. This period of time is called the statute of limitations. The particular statute of limitations that applies to certain debts depends on state law and on the type of lawsuit the debt collector files.

In Georgia, a lawsuit based on a contract (like a credit card contract) must be filed within six years from the date of default to avoid a statute of limitations defense. If the lawsuit is filed based on an “Account” or a retail installment contract (like a car loan), the period of time is four years from the date of default.

The statute of limitations starts on the date you first became behind on payments and never caught up. You can often find this date by looking on your credit reports for the “Date of First Delinquency.” However, the date from which you calculate the statute of limitations period may be affected by any subsequent payments made toward the debt or any new promises to pay the debt. This is referred to as renewing the statute of limitations. This is why it may not be in your best interest to make payments toward old debts – you may be placing yourself in legal jeopardy even if your intentions are good.

Once a debt becomes too old to be sued upon, this is referred to as “time-barred” debt. Once the statute of limitations expires, you have an absolute legal defense to the lawsuit. This does not mean that the debt collector cannot file a lawsuit against you. It is your legal responsibility to file a timely Answer to the lawsuit and assert your defense that the statute of limitation has expired. If you simply ignore the lawsuit, the debt collector could get a judgment against you, regardless of the expiration of the statute of limitations period.

If a debt collector is threatening to file a lawsuit against you for a time-barred debt, this is a violation of the Fair Debt Collection Practices Act. You should contact my office right away if you are receiving threatening letters or phone calls from debt collectors for a time-barred debt. There is a short one-year statute of limitations period that applies to your ability to file a lawsuit against a debt collector for its violation of the Fair Debt Collection Practices Act.

The Federal Trade Commission is a great resource for consumers regarding debt collection issues. Go here for an article on time barred debt.