Throughout the U.S., there are a variety of laws unique to each state that limit the amount of time a collector has to collect a debt from a consumer. It determines how long a creditor has to take legal action, including how long they have to use the court system to force debt repayment. If you are taken to court for a debt, it is important to understand the statute of limitations in your state, as you will have to prove the debt falls outside of that time frame.
In Florida, the statute of limitations is 5 years for a contract or written instrument and mortgage foreclosure, with all other debt, including oral contracts and credit card debt, typically falling under the 4-year catch-all.
What is important to know is not the type of debt, but the type of contract used to create the debt in the first place. After all, a written contract or agreement carries more weight, unless the contract has a specific time-frame spelled out within the contract itself. Oral agreements have a shorter time frame.
Trying to dodge creditors does not help the statute of limitations, as that limitation tolls or pauses if you move outside of the state for six months or more. It is important to recognize that in the state of Florida, that limitation period also stops if you make any type of voluntary payment on the debt.
That voluntary payment agreement must be in writing to be valid in court. However, if you do sign such an agreement, you restart the clock on your debt. In cases of fraud, the debt is typically time-barred after 12 years, regardless of when the fraud was discovered by the victim.
While you do need to prove the statute of limitations has expired in order to have the case dismissed, you may also be able to pursue your rights under the Fair Debt Collection Practices Act. Filing a lawsuit might be illegal once the statute of limitations has passed, but debt collectors count on your lack of knowledge regarding the time frames involved to move forward.
If a judgement is awarded to a debt collector in Florida, they have 20 years to attempt to collect the debt. Judgements from other states are limited to only 5 years. To avoid many of the issues involved with proving the statute of limitations applies to your debt, working to settle it can provide peace of mind and keep the debt collectors from using the court as a collection option.
Effective Legal Debt Solutions can assist in defining if your debt can be settled, based on your budget and amount of debt, particularly credit card debt. If you are interested in determining your options to settle your debt, contact us today!