Many wonder if old debt will follow them around forever. Is there a statute of limitations for collecting a debt? Well, the answer is that when you fail to make a payment on a debt, collectors typically have a number of years to bring a lawsuit in order to collect a debt. However, once the statute of limitations has lapsed, the debt may become time-barred and, therefore, no longer collectible. How long a statute of limitation lasts depends on the law in the state and the type of debt – contacting a bankruptcy attorney can help you evaluate the status of your debt.
Paying Debt That is Time-Barred
If you are in a difficult financial situation, you may have difficulty paying off old debt while trying to “live in the now”. If you do not pay time-barred debt, a creditor may not be able to take legal action, but it does not mean they will not continue to contact you unless you send them a letter asking them to stop. It is also likely the debt will continue to show up on credit reports for 7 years from the time it was reported. If the collector sues for time-barred debt – some will try – it is important to present documentation to the court showing when your last payment was made to trigger the statute of limitations – ignoring a lawsuit can result in a court judgement and possibly the garnishment of wages if the debt is not disputed.
Of course, most people want to cure their old debts even if they are struggling financially and may start to make a payment or two and then stop when things get tight. Keep in mind that making payments on time-barred debt, or even promising to pay, can restart the statute of limitations clock allowing a creditor to sue you not only for the debt, but also interest and fees that may be substantial with the passage of time. Before making any payments or entering into any agreements to pay off old debt, it is advisable to meet with an experienced attorney to ensure the amount you are paying settles the entire debt and releases you from any further obligations, retaining documentation to prove just that.
Contact an Experienced Bankruptcy Attorney for Help
Difficult financial situations tend to snowball, leaving individuals and families overwhelmed. More often than not, the solution to a difficult financial issue boils down to getting the information you need to turn things around. Start by calling Peoria, Illinois bankruptcy attorney, Charles E. Covey, at 309-674-8125 or use our contact form for a free evaluation to find out what strategies are available.
