protect against debt collections process

How to protect ourselves against a debt collections process

Many years ago, I was on the receiving end of a barrage of collection calls about a past-due credit card bill.

I exploited a little-known legality called the statute of limitations (i.e. SOL) on debt.

This put an end to the nightmare of these calls and harassment.

Yes, I owed the debt…

But the credit card company boosted the interest rate without notice.

And it made paying back the debt unaffordable.

I started looking into my options and rights.

And I stumbled upon a legal concept called the statute of limitations on credit card debt.

There is a legal loophole that protects us against greedy creditors.

And each state has its own protection statutes…

Creditors and debt collectors can sue debtors to collect a debt

But they can only do so while the debt is still “unaged.”

A debt remains “unaged” if we continue to pay this debt.

But once we stop paying, the clock starts to tick.

And depending on which state we live in, an aged debt cannot be pursued in a court of law.

This window of time differs state to state

The statute of limitations on debt’s time period is between 3 and 10 years.

(See the chart below for the most up-to-date statue of limitations.)

Once this time limit ends, the debt is legally discharged.

This means we no longer legally owe this debt.

And we can never be sued in court over it again.

(After the statute of limitations on debt ends, it is officially called a “time-barred debt.”)

WARNING: look out for this sneaky trap…

Making any sort of payment (or acknowledging a debt) resets the clock sort of speak.

So for me, I simply ignored all collection efforts and never fell for these debt-collection tricks.

What type of tricks?

As the statute of limitations approached, I was on the receiving end of all sorts of pressure…

I was asked to make any payment – even $10… just to “show good faith.”

But this is nothing more than a legal trick to restart the statute-of-limitations clock.

Here is the dirty-little secret about debt collectors…

Debt collectors may continue to pursue debtors even after the statute of limitations on debt ends.

But legally, a debt collector cannot use the courts to get a judgement.

And as a result, most debt collectors give up and move on.

It is a number’s game

Debt collectors buy huge portfolios of debt for pennies on the dollar.

Whatever they collect is theirs to keep.

But it is too cumbersome to ship these debt portfolios. This includes all the official paperwork we agreed to when signing up for the debt.

As a result, these debt collectors are breaking the law and instead rely on scare tactics to bully us into payment.

These debt collectors rely on our ignorance of the debt collection laws.

They make their profits from those who do not know how to protect themselves.

Those who do not know their legal rights freak out at the mere hint of legal action.

And they are easy prey.

Information is power

With me, the credit card company got greedy.

They raised their interest rate for no reason.

And they did it without my consent.

And when I challenged them with a “debt validation letter“, they fell silent.

As a result, I had my state’s law on my side and my local court wiped out the entire debt on my behalf.

Here is the most up-to-date list of the statute of limitations on debt:

State Oral Written Promissory Open-ended Accounts State Statute (Open Accounts)
AL 6 3 6 3 §6.2.37
AR 3 5 3 5 §4-3-118
AK 6 3 3 3 §09.10.053
AZ 3 6 6 6 HB 2412
CA 2 4 4 4 §337
CO 6 6 6 6 §13-80-103.5
CT 3 6 6 6 Chapter 926 Sec. 52-576
DE 3 3 3 3 Title 10 Sec.8106
DC 3 3 3 3 §12-301
FL 4 5 5 5 §95.11
GA 4 6 6 4** §9-3-25
HI 6 6 6 6 HRS 657-1(4)
IA 5 10 5 10 §614.1.5
ID 4 5 5 5 §5-216
IL 5 10 10 5 or 10*** 735 ILCS 5/13-206
IN 6 10 10 6 §34-11-2-9
KS 3 3 3 3 §60-512
KY 5 15 15 5 or 15 §413.120 & 413.090
LA 10 3 10 3 §2-3494-4
ME 6 6 6 6 §14-205-752
MD 3 3 6 3 §5-101
MA 6 6 6 6 §260-2
MI 6 6 6 6 §600.5807.8
MN 6 6 6 6 §541.05
MO 5 5 5 5 §516.120
MS 3 3 3 3 §15-1-29
MT 5 8 8 8 27-2-202
NC 3 3 5 3 §1-52.1
ND 6 6 6 6 28-01-16
NE 4 4 4 4 §25-206
NH 3 3 3 3 382-A:3-118
NJ 6 6 6 6 2A:14-1
NM 4 4 4 4 §37-1-4
NV 4 4 4 4 NRS 11.190
NY 6 6 6 6 §2-213
OH 6 6 6 6 §2305.07
OK 3 3 or 5 5 3 or 5 §12-95A(1), (2)
OR 6 6 6 6 §12.08
PA 4 4 4 4 42 Pa. C.S.5525(a)
RI 10 10 10 10 §6A-2-725
SC 10 10 3 3 SEC 15-3-530
SD 3 6 6 6 §15-2-13
TN 6 6 6 6 28-3-109
TX 4 4 4 4 §16.004
UT 4 6 6 4 78-12-25
VA 3 5 6 3 8.01-246
VT 6 6 5 6 §9A-3-118
WA 3 6 6 6 4.16.040
WI 6 6 10 6 893.43
WV 10 10 10 10 §55-2-6
WY 8 10 10 8 §1-3-105

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Markus Allen

Family man. Truth seeker. Traveler... more about me here...

 


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