|
(PRWEB) July 5, 2005 -- Every state has laws governing the
time limitations in which a person or entity can file suit
to collect outstanding debt. Once a debt passes beyond the
time limitations of your state, a debt collector no longer
has the right to file charges on that particular debt. This
law is widely known as Statutes of Limitations. Generally,
a creditor gives up the right to file suit after a period
of 6 years from the time the debt first became delinquent.
However, many states have adopted their own limitations.
Statutes
of limitations are only limited to oral agreements, promissory
notes, open accounts, written contracts, mortgages, loans,
auto payments and foreign/domestic judgments. There are no
statutes of limitations on federal student loans, income taxes,
fines and in some states past due child support.
Which State Law Applies to me?
|
Generally,
a creditor gives up the right to file suit and collect
outstanding debt after a period of 6 years from the
time the debt first became delinquent. However, many
states have adopted their own limitations which can
range anywhere from 2 to 15 years.
|
In
general terms, if the creditor wants to file charges against
a particular customer, the creiditor must file charges on
a judicial court where the customer resides. However, there
are exceptions to this rule. For instance,
If you live in Florida and you travel to New Jersey and sign
a contract (not revolving credit accounts) in that state,
the creditor can seek a judgment in the state where the contract
was signed. In such a case, you will be sued under New Jersey
statute of limitations.
Child support orders are usually governed and enforced in
that particular state. If you have a child support order from
New York and you currently reside in Florida, you can be sued
in New York State for any outstanding delinquencies.
For all credit related contracts such as, mortgages, car loans
and etc, the creditor has the right to sue the customer in
any state they prefer. Under such situations, creiditors always
choose the state with the longest statute of limitations or
the state that grant the highest amount of award.
What
is my State’s Statute of Limitations?
As we mentioned earlier, every state has its own statute of
limitations and it applies to every case differently. It is
important to keep in mind the credtor has the right to file
suite against you even if the statute of limitations has expired.
In such a situation, you can ask the residing judge to dismiss
the case on the grounds that the statute of limitations has
expired.
The attached table lists the number of years in which various
types of debt can be collected in each state. The information
below can be altered or changed by the states at any given
time, so consult an attorney before taking any legal actions.
Debt and Credit Terms
Open Accounts - These are revolving lines of credit with varying
credit limits and balances. For instance, credit cards, home
equity lines of credit and overdraft creidit accounts can
be identified as open accounts.
Written Contracts - The customer agrees to pay the loan under
the terms written in the loan document. This document has
to be signed by both parties (debtor and creditor) in order
to be legally effective.
Promissory Notes - The document signed by a borrower promising
repayment of a loan. It shows the amount of monthly payments,
interest rate, first payment date, last payment date, and
the late charge and prepayment provisions. Mortgages, auto
loans and student loans are prime examples of promissory notes.
Oral Contracts - An unwritten agreement between two or more
parties. Oral contracts are just as binding as written contracts,
providing that sufficient proof of the contract exists.
About CreditGUARD
CreditGUARD of America is a non-profit credit counseling agency
that assists consumers through creidit counseling and financial
education. Please visit our web site at www.creditguard.org
or call 1-800-867-0406 for a free consultation with a certified
credit counselor.
• Adverse Credit History
• Credit Score
• Ace Debt Relief Offers Free Credit Card Debt Consultation
• The Debt Counsellors Offers Tips on Debt Consolidation
|
