When you are contacted by a debt collector over a debt taken out years ago, you may be nervous, as you may have forgotten about it. Whether you are harassed or sued, you have rights as a consumer. If you are contacted by a collector, understanding the statute of limitations for debt collection is critical, as yes, there is a statute of limitations for most debt collection lawsuits. In California, the statute of limitations is four years. If the statute of limitations expires, creditors may still attempt to collect the debt, but they will not have the legal grounds to pursue a lawsuit. The following blog explores what you should know about these matters, including actions that can reset the statute of limitations, and why you may have to connect with a California fraud debt collection defense lawyer to help protect your rights during these times.
What Is the Statute of Limitations for Debt Collection in California?
In California, the statute of limitations for a collector to pursue a debt is four years. This period starts from the date of the first missed payment. Once the statute of limitations passes, a collector is no longer able to take legal action against someone who owes a debt.
The statute of limitations for debt collection under California Code of Civil Procedure § 337 applies to both written contracts and the majority of consumer debts.
What Debts Typically Fall Under the Four-Year Rule
- Credit card debt and other revolving debt accounts
- Written contracts, including most consumer financing agreements
- Medical debt owed to both providers and collectors
- Personal and installment loans
- Some oral contracts may have shorter limitation periods, depending on the facts of the contract
What Happens After the Statute of Limitations Has Expired?
It’s important to understand that the collector can still pursue an expired debt in Arroyo Grande and the surrounding Central California communities, so long as they do not violate the Fair Debt Collection Practices Act (FDCPA). If they violate this act, they can be held responsible for these breaches.
What Debt Collectors Can and Cannot Do
- Debt collectors can still attempt to collect debts after the statute of limitations has elapsed
- Debt collectors cannot file a lawsuit for an expired debt
- Debt collectors are also prohibited from threatening a lawsuit if they cannot legally sue
- Debt collectors must comply with federal laws when communicating with debtors
- Debt collectors must cease contacting you if you request it in writing
What Actions Can Restart the Statute of Limitations in California?
You should also note that if you make a payment toward the debt or sign a written agreement to begin a repayment plan, it can restart the clock on the statute of limitations, even if it has expired. This means if you make a single payment, you can open yourself up to the potential for a lawsuit over the debt.
Common Mistakes that Can Restart the Clock
- Making a partial payment on an old debt
- Setting up automatic payments on expired accounts
- Submitting a written acknowledgment of the debt
- Verbally admitting that you owe the debts
- Signing a new repayment contract
What Should I Do if a Debt Collector Contacts Me?
If you are contacted regarding a debt in California, the most important thing you should do is refrain from acknowledging it or agreeing to pay. As mentioned, doing so may restart the clock, making you liable for a debt that may have already expired.
Instead, you should inform the creditor that you will not discuss the debt until you have received a formal debt validation letter. This is a necessary document, as it can help provide important information regarding the debt, such as how much is owed, who the original creditor is, and when it was taken out.
Steps to Take When Contacted by a Debt Collector
- Request a formal debt validation notice after you are initially contacted
- Review the date of the last payment to determine if the statute of limitations is applicable
- Do not make any payments until you have confirmed the statute of limitations status
- Keep a detailed record of all communications with the collector
- Consider enlisting an attorney to help you submit a valid cease-and-desist request to halt contact over the debt
What Should I Do if a Collector Tries to Sue Me for an Old Debt?
If you are sued over a debt older than four years in Arroyo Grande or anywhere throughout California, understanding what you should do in these matters is critical. Generally, the most important step you should take is to connect with an experienced debt collection defense attorney.
Your attorney can examine the details of your case to help craft a defense and determine if the collector violated the FDCPA. Not only can they help fight to have this unfair and illegal lawsuit dismissed, but you may be able to fight for damages. If you are caused stress or anxiety because of the lawsuit, you may be able to hold them liable for these matters.
Legal Violations You May Be Able to Challenge
- Filing a lawsuit after the statute of limitations has expired
- Threatening to take legal action when the collector cannot legally do so
- Lying about the validity of the debt or the amount owed
- Using abusive, harassing, or manipulative tactics to get you to repay
- Discussing your debt with anyone other than you or your attorney
Contact an Experienced Central California Consumer Defense Attorney
If this reflects your circumstances, the team at Loker Law is ready to assist you. We understand these matters, which is why we will do everything possible to assist you. Connect with us today to learn how we can help guide you through these challenging times to protect your rights.
