Old Debt & the Statute of Limitations

Consumers are often plagued by debt collectors collecting old debts. These defaulted debts are sold to secondary creditors. These secondary creditors (bill collectors) are governed by the Fair Debt Collection Practices Act (FDCPA). In Minnesota, because these debts are based on a contract between the consumer and the original creditor, to properly succeed a lawsuit to collect these debts must be brought within six years from the time of default or reaffirmation of the debt. If you reside in Minnesota, never pay anything toward a defaulted consumer debt that is older than six years! When presented to courts as defenses, the Statute of Limitations prevents creditors from obtaining judgments for these old debts. After seven years, one hundred and eighty days, these debts should not even appear on a consumer’s credit report because they are considered obsolete. A debt collector who is governed by the FDCPA may violate the Act if a debt collector sues or threatens to sue on a debt which is not collectable because of the six year Statute of Limitations.

The information discussed above is not well known or understood by consumers. Typically, consumers do not talk to other consumers about their financial problems. People may discuss their divorces and how good their lawyers are, but they are reluctant to tell others about their debts and the attorneys who help them.
Once a consumer retains a lawyer and a debt collector who is governed by the FDCPA knows it, that debt collector may contact only the lawyer and not the consumer. The client-lawyer relationship ends the unwanted intrusions on a consumer’s life by the debt collector.

If a debt collector is trying to collect an old debt that may be past your state's statute of limitations, you should contact an attorney located in our attorney directory.

Please note this blog is being designed and updated in conjunction with Help Manage My Debt, Inc. Please post a coment or write us an e-mail if you have questions. Thank you.