When it comes to debt collection, each state creates limits on how long a debt collector has to pursue remedies for the breach of a contract. Once that statute of limitations is expired, then their options are limited. In California, the statute of limitations begins when a contract is determined to be breached or broken. The breach occurs when an account is charged off, typically at 180 days delinquent.

If you are trying to determine if your debt has exceeded the statute of limitations, then you need to determine when the last payment was made and count 180 days from that date. That is when the time clock for the statute of limitations began.

California places the limits at 4 years for written contracts and 2 years for oral agreements. That statute of limitations will be stopped if the debtor makes a payment after the expiration of the limitations period that applies to that particular debt.

It is important not to ignore court summons for a debt, because that could result in a default judgement being issued against you. Once that occurs, the debt collector can garnish your wages or bank accounts. While a debt collector cannot sue you to collect on a time-barred debt, they may still try to collect. Keeping track of time-frames on your debt is key to disputing them, particularly in court.

If a debt-collector contacts you about a debt that is time-barred, you can ask them that question. Now they may decline to answer, but if they do answer, they must tell you the truth. Another question to ask is when the last payment was made on the debt. Once you know this, you can determine if the statute of limitations time frame has been completed. If you inform the collector that the statute of limitations has expired, then in most cases, the collector will stop the calls.

It is also against the law for a debt collector to threaten to sue you on a debt that has reached the statute of limitations. You have the option to file a complaint with the Federal Trade Commission (FTC) and your state attorney general. Recognize that not paying the debt, however, can have serious consequences in terms of your credit rating, thus impacting your ability to obtain credit, insurance, or other financial opportunities.

If you decide to pay off the debt, be sure to get a letter from the collector outlining the terms for clearing the debt and showing that the debt is now settled. It will release you from any further obligations, and also serve to protect you should they try to collect the debt again at a later date.

Granted, the best way to avoid dealing with the statute of limitations is to address your debts, such as a debt settlement option. Effective Legal Debt Solutions can help you to address your debt and start you down the road to repairing your credit. Contact us today to learn more about your options!