How to Deal With Debt Collectors: The Statute of Limitations

26 May How to Deal With Debt Collectors: The Statute of Limitations

Collection agents are usually rude, nasty, abusive and just plain mean. Their anger and apparent interest in you is phony, however; this is “impersonal anger” with a goal. The goal is to get you to pay them.

Today, with debt buyers roving the landscape snapping up old debt (and in some cases *very* old debt I successfully defended a client earlier this month in a lawsuit brought on a debt from 1978!), it is especially important for you to know some of the tricks these folks play to get out from under the statute of limitations, and how to avoid them.

The statute of limitations is a law that requires actions to collect debt to be taken within a certain period of time. Here in Maryland, the general statute of limitations is three years, so if a lawsuit isn’t brought against you within three years from the date you incurred the debt, with a few exceptions, you have an ironclad defense to the suit. It’s in those exceptions that debt collectors make their money.

The two biggest are payment and acknowledgment of debt. If you make a payment on a debt, however small, the statute of limitations starts running all over. So if my client with the 1978 debt had sent in a $10 payment last year, limitations would not have been a defense.

The second exception is acknowledging the debt. So if you tell the collector, “I know I owe the money; I just can’t pay it,” limitations starts over.
What should you do? Don’t send in a payment on a limitations-barred debt. Don’t acknowledge the debt. And to get the collector to stop calling? Read How To Deal With Debt Collectors: Stop the Calls!

Related Posts Plugin for WordPress, Blogger...
The following two tabs change content below.
Brett Weiss, a senior partner at Chung & Press, LLC, represents people and businesses in all phases of bankruptcy. He has experience in complex individual Chapter 7, Chapter 11 and Chapter 13 bankruptcy cases, and in Chapter 11 small business restructuring and reorganization. Mr. Weiss lectures nationally on bankruptcy issues. He has testified before the Federal Bankruptcy Rules Committee, the Consumer Financial Protection Bureau, and has twice testified before Congress on bankruptcy and credit issues. Brett Weiss is the co-author of Chapter 11 for Individual Debtors, and has written Not Dead Yet: Bankruptcy After BAPCPA, for the Maryland Bar Journal, as well as hundreds of blogs for the Bankruptcy Law Network. With his law partner, he recorded a 13-hour basic bankruptcy training series, and leads intensive three-day Chapter 11 training boot camps. Mr. Weiss has received international media attention in connection with his work. He was interviewed by Barbara Walters on The View, has appeared on the Today Show, Good Morning America, ABC News with Peter Jennings, the Montel Williams Show, National Public Radio, AARP-TV, the BBC World Service, German state television, and numerous local radio and television programs, and been quoted in Money magazine, The Washington Post and The Baltimore Sun, among others. Brett Weiss is the Maryland State Chair for the National Association of Consumer Bankruptcy Attorneys, a founding member of the Bankruptcy Law Network, on the board of the Maryland State Bar Consumer Bankruptcy Council, and a member of the American Bankruptcy Institute, the Bankruptcy Bar Association of Maryland, and the Civil Justice Network. He has been recognized as a “Super Lawyer” every year since 2007 for Maryland and the District of Columbia, and in 2011 received the Distinguished Service Award from the National Association of Consumer Bankruptcy Attorneys for his work on behalf of consumers across the country. Mr. Weiss is admitted to practice before Maryland and District of Columbia federal and state courts, the United States Courts of Appeals for the DC, Fourth and Eighth Circuits, The United States Tax Court, and the Supreme Court of the United States, and has been practicing law since 1983.
2 Comments

Sorry, the comment form is closed at this time.