Just received this question from a reader:
Q. I had a collection that originated in 2004 in Maryland. The statute of limitations (SOL) was 3 years; 2007 came and went with no suit from the collection agency.
Now I live in a state where the SOL on a written contract is 6 years. If they can bring suit here, they’re covered clean up to 2010. Can they sue me in the state I currently live in when the contract was formed in MD and is past that 3 year SOL?
A. The statute of limitations on a debt is the time period in which a creditor has to sue a debtor after the debt goies into default. For example: if a consumer defaults on a debt in 2003 and the state’s statute of limitations is 4 years, the statute of limitations runs out in 2007. if the creditor sues the debtor in 2008, the suit can be thrown out due to the fact that the statute of limitations has expired.
Like the person posing the question above: many people who have moved out of state find themselves the object of a lawsuit in a new state and are confused about which state’s SOL should be used. Here are some guidelines:
- Technically speaking, the statute of limitations for a debt are tied to the state where the debt was created.
- If a creditor sues you, in general, the SOL of the state in which the suit is filed are the enforceable ones. This often works to the advantage of a consumer who moves to a state with a shorter SOL than the one where the debt was created.
- Some states have a “borrowing statute” law on the books that allows you to use the shorter SOL from a previous state.
- If you left the state where the debt was created BEFORE the SOL ran out, the SOL cannot be revived – not even with a ‘borrowing’ statute.
- Florida, Kentucky, Missouri, Pennsylvania, Oklahoma and Wisconsin do not apply any residency requirements to determine whether to borrow another state’s statute of limitation. In cases filed in these jurisdictions, even if the plaintiff and defendant are residents of the state in which the suit is filed, courts will apply the limitation period of the state in which the borrower lived during the creation of the debt to determine whether suit is timely filed.
In this case, the reader cannot be sued, even in a state where a longer SOL applies, due to the fact that the statute of limiations ran out before he moved out of state.
Related posts:
- Statute of Limitations on Debt When You Move The statute of limitations (SOL) on debt is an important...
- Credit Cards – Open Ended or Written Accounts? For some people being hounded or even sued for credit...
- Debts and Finances Forcing Us to Move Out of Country Q. This past summer we completed a short sale on...
- NY Attorney General Throws Out 100,000 Judgments for Consumer Debt New York State Attorney General Andrew M. Cuomo filed the...
- Can a Collection Agency Issue a 1099-C for Settled Debt? Under current Office of the Comptroller of the Currency (OCC)...
So, basically, and correct me if I’m wrong…
I opened a credit card account in Illinois (4 yr SOL) in 2000, with last payment in June, 2004…4 years 7 months ago.
I moved to Missouri in early 2005 (5 yr SOL)
Because of Missouri’s borrowing statute, the Illinois timeline is the one that would be used in a potential case?
Same question… I had a car repoed in North Carolina in 2005. (SOL 3 years) I moved to Missouri a couple of months later. Are you saying that the NC SOL would apply even though I now live in Missouri?
ALSO, HOW CAN I FIND OUT WHEN THE ACCOUNT WAS CHARGED OFF? WHEN I WAS ORIGINALLY SERVED, LAST YEAR, UNTIL NOW, WHEN THE COURT DATE IS SET, THE AMOUNT WENT UP FROM $8650 TO $11724.
First thing is to not type in ALL CAPS.
We bought a car that was reposessed in 1998. We haven’t heard from them since. We got a letter from the IRS last week stating that a 1099-C was filed and we now owe the IRS $1221.00 if we pay soon. Is this legal for the creditor to file this claim since the debt is more than ten years old?
I am not sure of the IRS regulations on this. (Sometimes, neither are they.) Does anyone else know?
I have credit card that the last payment was on October 5, 2005. The state where I live has a SOL of 4 years, but I am moving to a state with a SOL of 6 years in about three weeks. I cannot push back the move. Am I screwed? Oh, the collection agency in question just sends me monthly letters offering me reduced settlements…I haven’t ever spoken with them.
Oh, I should have said that I live in Texas, and am moving to Oregon.
See if Oregon has a “borrowing statute”, which means the court will use the SOL where the debt originated.
I thought since Oregon had reverse borrowing, then they wouldn’t have a borrowing statute.
I found this…sounds like a borrowing statute
12.430 Claims based on law of other states; limitation period. (1) Except as provided by ORS 12.450, if a claim is substantively based:
(a) Upon the law of one other state, the limitation period of that state applies; or
(b) Upon the law of more than one state, the limitation period of one of those states, chosen by the law of conflict of laws of this state, applies.
(2) The limitation period of this state applies to all other claims. [1987 c.536 §2]
Yeah, it does sound like a borrowing statute. But I would like to see some case law to back it up.
Where might I find that? Oh, and the here is the reverse borrower statute…
12.450 When limitation period of another state not applicable.
If the court determines that the limitation period of another state applicable under ORS 12.430 and 12.440 is substantially different from the limitation period of this state and has not afforded a fair opportunity to sue upon, or imposes an unfair burden in defending against the claim, the limitation period of this state applies. [1987 c.536 §4]
Wonder what “substantially different” is? The one case that I saw was something unending.
I have a debt from an apartment in Fl from 2004, that is showing on my report. I was never notified of the debt, and I have no idea what the $2702 could before.
The SoL in Fl for a written contract is 5 yrs, so it is expired, but I moved to Oh in 2006, I know they cannot sue me, but what obligations do I have to them, and how do I get them to take it off my credit report?
If Ohio doesn’t have a borrowing statute, and the credit card contract doesn’t say it must go by the rules of Delaware of Virgina (or another state), then the SOL is the Ohio SOL.