Time Limits on Debt Collection and Your Rights under the Law
There are many cases in which a consumer may receive contact from a debt collector in an attempt to collect on a debt that is many years old. This brings up the question of whether or not a company can collect on a debt that has gone long uncollected. It is important for consumers to clearly understand the law in regard to time limits on debt collection. The law sets forth clear legal rights for consumers.
There is a specific amount of time that a creditor has to start legal proceedings. Legal proceedings are the ultimate recourse that a creditor has on collecting the debt. The goal is to enter a legal judgment against the debtor, so that the creditor can enforce the debt against the debtor’s assets. In cases of long uncollected debts, there is something known as the statute of limitations. In simple terms, there is a specific amount of time that a creditor has to file a lawsuit and collect on the debt. Past this statute of limitations, a creditor can no longer can no longer collect on a debt by filing a lawsuit. Sometimes, third-party collection agencies are hired to attempt to collect on debts that are no longer collectible. In this case, it is very important for the consumer to understand his or her legal rights. Pass the time set forth by the statute of limitations, a consumer may no longer have a legal responsibility to repay the debt.
Third-party collection agencies will often ignore the age of the debt and attempt to collect on it anyway. In some cases, a creditor will attempt to sue for the debt by filing a lawsuit with the court. It is important in these situations that the consumer appear in court to prove that the statute of limitations has expired. In our legal system, anyone, including companies, can file a lawsuit for anything. If the defending party does not appear, then the plaintiff will receive what is called a default judgment. A default judgment is when a lawsuit is filed with the court and is not defended. The judgment finds for the plaintiff, by default.
There is no law preventing a debt collector from attempting to collect a debt. Regardless of the time that has passed, a debt collector has a legal right to try to collect. However, a debt collector crosses the line when they make false representation about the legal status of the debt. This is a very fine line and it is important to keep the advice of a debt collection attorney if you feel you are being harassed about a debt that may no longer be owed.
If you have received a phone call from a debt collector in an attempt to collect on a debt that is many years old, contact Brian Hoag. Hoag law firm is dedicated to assisting consumers protect their rights against third-party collection agencies and creditors that attempts to harass and go beyond the legal remedies they are afforded by law.