Debt troubles can extend far beyond harassing calls from creditors. In some cases, people have found themselves in court over an unpaid credit card balance, and even some that may not have been legitimate debts. The problem with credit card debt lawsuits is that each state carries its own laws about the statute of limitations on collection periods, leaving consumers without a good understanding of their options when being sued.
The statute of limitations for collection on an old debt is anywhere between 3 to 10 years, depending on the state in which the debt is owned. One important aspect to understand about the statute of limitations on a debt is that the time period begins on the date of last activity.
This means that if a debtor acknowledges, pays or disputes a debt two years after it has gone unpaid, the statute of limitation starts from that date forward; not the date of the last purchase. Many people have been put into a tight financial position after they attempted to resolve an old debt after several years, only to find out the collection statute had been extended.
Luckily, debtors do have rights when it comes to disputing or objecting to an old debt in court. If the debt was previously “settled” through an agreement with the creditor, the debtor should provide this information to the court in order to have the claim dismissed. If the debtor feels the statute of collection period has expired, they should check with their state to determine the rules and guidelines for disputing aged debts. If the debt is within the legal collection period and has been verified, the debtor should seek counsel from a bankruptcy attorney to manage the debts and halt the lawsuit. It is important to remember that it is the creditor, not the debtor, who holds the burden of proof in a debt lawsuit.