How long can a debt collector pursue an old debt? The answer to this commonly asked question is simple. Generally, a debt collector can pursue an old debt as long as they want. That said, the methods in which they pursue that debt is impacted over time. The biggest influence on allowed methods is the Statute of Limitations for debt in PA. Specifically, 42 Pa. C.S.A. § 5525. Under this statute, breach of contract claims have a 4 year window. But what does this mean exactly? Why is it they can keep collecting after the 4 year mark?
Statute of Limitations Applies to Legal Claims, Not the Debt Itself
There is a common misconception that once a debt passes the time allotted by the Statute of Limitations, then it cannot be pursued by a debt collector. This belief is untrue. The Statute of Limitations applies to claims made in court. Generally, after 4 years in PA, a debt collector cannot sue you but that does not mean they can’t continue to try and collect by other means including calling, sending letters etc.
Another item to consider is that the Statute of Limitations is controlled by state law. This means that if you move to another state, the debt collector’s ability to use the court system may change. If you have a debt that is time-barred, it is recommend paying close attention to the laws surrounding the issue. Both for jurisdictions you move to and in PA. Laws change so it would be in your best interest to position yourself in a way that you do not get an unwelcome surprise.
Understanding When the Time for the Statute of Limitations Starts
Understanding how the Statute of Limitations applies is a great start but it isn’t everything you need to know. You must also understand when the clock starts counting toward that 4 year mark. In most situations, the clock starts when a payment is missed on the account. Once the clock starts, it is exactly 4 years. No close to but exactly. Even if it has been 364 days and 23 hours, they still have the ability to bring legal action.
It is also important to understand that the time can be reset. Something as simple as a promise to pay can make the entire time restart from the beginning. In some cases, admitting to the debt can even play a factor in this, especially when dealing with a debt buyer.
How To Use the Statute of Limitations as a Defense
It may be hard to believe, but some unscrupulous debt collectors will try to bring a legal action against you despite the action being time-barred. This defense is an affirmative defense. Unfortunately, the court has no way of knowing the Statute of Limitations applies unless you bring it up. If you fail to bring it up, you are potentially waiving this defense. Depending on the court, this defense must be in the written response as a new matter in the answer to the complaint. This is why we tell everyone, always consult with an attorney. Consultations at Starks Law are always free so there is no reason not to. A quick phone call is an easy effort to make to ensure you are not losing/waiving the defenses available to you.
This court’s role does not include looking for defenses on your behalf nor will they automatically apply affirmative defenses for you. If the action is time-barred, you must demonstrate this to the court. If you assume a judgment against you is meaningless because the action should have been time-barred, you would be wrong. Once a judgment is issued against you, the Statute of Limitations no longer applies. You waived the defense by failing to assert it.
What Happens to the Debt Collector if They Bring a Legal Action on Time-Barred Debt?
Nothing will happen to them automatically. Most people have no idea what time-barred debt or the Statute of Limitations even is. The debt collectors are often betting that people do not know or understand these. To compound this, most people do not know what their rights are in situations where debt collectors attempt to ignore the Statute of Limitations and bring a lawsuit anyway. You do, however, have rights and protections for when debt collectors misrepresent the legal status of the debt. This is found under the FDCPA.
If a debt collector sues you on debt they know to be time-barred, you can bring a legal action against them under the Fair Debt Collection Practices Act(‘FDCPA’). Not only does this statute allow for statutory damages of up to $1,000, it also has a fee-shifting provision. Meaning, the burden of your attorney’s fees become the debt collector’s problem. Click here to learn more about filing an FDCPA claim.
In conclusion, the Statute of Limitations is a powerful legal defense that is often entirely unknown or misunderstood. It affords defenses for old debt in a legal setting but it does not extinguish the debt on its own. It simply prevents legal action. In PA, it prevents legal action for debt that is 4 years old or older.
If you have questions about whether the Statute of Limitations is an available defense for legal action you are facing, do not hesitate to give us a call. Additionally, if you believe you are the victim of a violation of the FDCPA, reach out to us so we can go over your rights and your possible recovery. At Starks Law, consultations are always free.