I have talked about debt collectors collecting on a debt past the statute of limitations before. But, it is time to update this as it continues to happen!
The statute of limitations states a certain amount of time for a debt collector to collect on a debt. In California, it is generally four years on a debt if the debt is based on a writing. If the debt is oral, it is generally two years. (Again, talk to an attorney about your specific situation.)
So, at four years and 2 days (for a written contract), the statute of limitations has expired. However, I get calls from people who are receiving calls from debt collectors on old debts. Can they do this?
I would tell you no. But, alas, the American Collectors Association disagrees with me. In “A Guide to the Fair Debt Collection Practices Act 137”, 1999, they write:
“ACA maintains the position that collectors can contact consumers about accounts after the statute of limitations has expired, as long as no legal remedies, such as a lawsuit or wage garnishment are taken or threatened.”
So, they think debt collectors can attempt to collect on old debts, but not sue on them. In other words, they can write you a letter, they can call you, but they cannot sue you, at least according to the American Collections Association.
Some debt collection attorneys, however, take it one step further and believe they can sue on these old debts. They put the burden on the consumer to raise the statute of limitations as an affirmative defense. The reason they do this is that if the statute of limitations is not raised as a defense, it is waived. That means you may lose out on the ability to argue this defense.
Anyone else see why they may have a bad reputation? For what its worth, as long as this is the position of debt collectors, any time you receive an initial phone call or letter from a debt collector, you should immediately seek the advice of counsel. You do not want to end up paying on a debt that is past the statute of limitations. Let me be clear: If you are a consumer, do not be surprised to start seeing more of these letters on old debts. Do not try to pay the debt or negotiate a payment plan. Send a verification letter. And if they sue you, contact an attorney immediately. If you do not assert the statute of limitations, you may waive that defense.