What Should You Do if a Collector Tries to Collect a Time-Barred Debt?

(Page 2 of 2 of Time-Barred Debts: When Creditors and Collectors Cannot Sue You for Unpaid Debts )

Except for in a few states where the expiration of the statute of limitations extinguishes a debt, a debt collector can still contact you and ask you to pay up, even if the statute of limitations on a debt has passed.

The most important thing is not to say or do anything—whether on the phone or in a written communication—that in any way acknowledges that you owe the debt. Acknowledging the debt or making even a token payment can extend or revive the statute of limitations in some states.

Be Careful Not to Waive, Extend, or Revive the Statute of Limitations

If you answer a collections suit by saying that the statute of limitations prevents the collector from getting a judgment, the collector might argue that you have waived, extended, or revived the statute of limitations in your earlier dealings.

Waiving the Statute of Limitations

If you waive the statute of limitations on a debt, it means you give up your right to assert it as a defense later on. The law makes it very difficult for a consumer to waive the statute of limitations by accident. A court will uphold a waiver only if you understood what you were doing when you agreed to waive the statute of limitations for your debt.

In certain circumstances, even then, a waiver might be unenforceable. If you think you might have waived the statute of limitations, you should still raise it as a defense (and force the creditor to demonstrate that you waived it).

Extending the Statute of Limitations

Extending the statute is often called "tolling." Tolling or extending the statute temporarily stops the clock for a particular reason, such as the collector agreeing to extend your time to pay.

Reviving the Statute of Limitations

Reviving a statute of limitations means that the entire time period begins again. Depending on your state, this revival can happen if you make a partial payment on a debt or otherwise acknowledge that you owe a debt that you haven't been paying. In some states, a partial payment will only toll the statute rather than revive it.

A new promise to pay a debt might also revive the statute of limitations in some circumstances. In most states, an oral promise can revive a statute of limitations, but the promise must be in writing in a few states.

For a state-by-state chart on statutes of limitations for various debts, get Solve Your Money Troubles: Debt, Credit & Bankruptcy by Amy Loftsgordon and Cara O'Neill (Nolo). This book contains everything you need to get out of debt and repair your credit.

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