What is a time bared debt?
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Can someone pls explain to me in simple words what a time bared debt is?
Re: Time bared debts explained
The law sets a time frame for a debt collector to bring a lawsuit against you. If the person you own money to (or a debt collector acting on his name) did nothing to collect the money in the defined time frame – then he can no longer file a lawsuit against you, meaning there is nothing legal he can do to collect the money from you.
This time frame is called “Statute of Limitations” or SOL. It is defined by state laws and varies from state to state. SOL can be short as 2 yrs or longer than 10 yrs, depending on type of debt and state (See this list of SOL).
Debts that have passed the statute of limitations are called “time bared debts“.
When the SOL has passed, that does not mean that the debt is erased. It only means that if you’re sued for the debt, you can use the SOL as an affirmative defense in court. If you are sued after the SOL, you will need to show up, and tell the judge that the debt is time barred as it is beyond the SOL.
The only BIG problem with SOL is that every time someone does something about the debt – the clock is reset.
For example, if a collection agency contacted you a year ago to collect a debt and you said something like “I don’t have any money right now“, that could be seen as an admission that the debt is yours, and in some states, that could restart the SOL clock!
Theoretically, if a debt collector calls you every time before the SOL is about to expire – the clock is reset every time and never expires. Tricky! This way, a theoretical 2 yr SOL can extend forever!
Thank you. Great explanation.
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