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Debt Collection and the Statute of Limitations

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Debt Collection and the Statute of Limitations

Once the statute of limitation passes on a debt, the creditor can no longer go after the debtor for the amount owed. However, there are some exceptions that apply. Some creditors will attempt to trap debtors under one of the exceptions, and subsequently, collect on the debt.

What Is the Statute of Limitations?

A statute of limitations is an amount of time that a person has to bring a lawsuit. For example, in most cases, you can’t bring a lawsuit for something that happened 10 years ago—the statute of limitations will have run out.

The statute of limitations for debt collections varies by state. This period of time may range anywhere from 3 years to 10 years.

What Is Zombie Debt Enforcement?

Even after a debt has been time-barred, some aggressive debt collectors use zombie debt enforcement tactics to collect. Zombie debt enforcement is where a creditor hires a collections agency to look for you and to force you into paying. This debt collections method also covers debts that have been discharged by bankruptcies or debts that do not even belong to you.

What Are Some Zombie Debt Tactics?

Upon locating you, zombie debt collectors will try to trick you to reset the statute of limitations such that the collector can sue you. So long as you pay a small portion of the debt back after the statute of limitations has run, the statute of limitations will reset. These tactics to convince you to pay a small portion of your debt include:

  • Promises to leave you alone if you pay
  • Not reporting your debt on your credit report
  • Threatening to sue
  • Harassing your customers
  • Pretending they are lawyers in the process of suing you

What Should I Do If a Zombie Collector Is after Me?

You should never agree to revive your debt or pay any portion thereof. It is important that you consult a business lawyer experienced in debt collections laws. He will help you send a cease and desist letter to the creditor to prevent them from tricking and harassing you. Moreover, he can seek legal remedies if the creditor continues to harass you.

Photo of page author Mabel Yee

, LegalMatch Legal Writer

Last Modified: 07-16-2014 12:16 PM PDT

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