Does payment on an account restart the SOL?

[whatnot]

Actually, there are 18 states in which payment does not restart the clock (review or extend SOL). The statute of limitations is only extended by new written promise to pay in these 18 states:

Arizona, California, .

Since I'm in AZ I'm wondering other then the SOL statue what I can use that actually says that payment does not extend SOL.

The state statue doesn't directly talk about payments made after SOL starts.

[ohnowwhat]

What if your credit report says you made a payment on an alleged debt and you never did so it set the SOL up to be valid ? Would I ask proof of said payment?

[Edward4502]

Actually, there are 18 states in which payment does not restart the clock (review or extend SOL). The statute of limitations is only extended by new written promise to pay in these 18 states:

Arizona, California, Florida, Iowa, Kansas, Maine, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nevada, New York, Texas, Virginia, West Virgina, Wisconsin.

 

Hi,

 

I live in Arizona.

 

My credit card debt is so old it should be beyond the statute of limitations for a lawsuit.  

 

Date of last payment on the account was February 2006.

 

Date of First Delinquency according to my Equifax credit report was April 2006.

 

I have a letter from the original creditor dated May 2006 which says that my account was 30 days past due.

 

My question is this, can someone tell which Arizona law or laws state that "The statute of limitations is only extended by new written promise to pay..."  I have been unable to find that law and I would like to read it for myself and if necessary I could use it to defend against a lawsuit from a junk debt buyer.

 

The reason I am asking this is because sometimes a junk debt buyer will lie about a debtor making a payment just to reset the S.O.L. so their lawsuit can move forward.

 

But if there is an Arizona law that says there must be a written promise to pay, it is one more hurdle for the junk debt buyer to leap over to get a judgment.

 

So far, I have contacted by a junk debt buyer about the debt and they have threatened a lawsuit, but have not filed a lawsuit yet.

 

I have disputed the validity of the debt, but they have not sent anything back to me.  They just fell silent for now-- no more phone calls and no more letters since they received my dispute letter.

[BV80]

12-508. Effect of acknowledgment upon barred action

When an action is barred by limitation no acknowledgment of the justness of the claim made subsequent to the time it became due shall be admitted in evidence to take the action out of the operation of the law, unless the acknowledgment is in writing and signed by the party to be charged thereby.

 

http://www.azleg.gov/FormatDocument.asp?inDoc=/ars/12/00508.htm&Title=12&DocType=ARS

[admin]

@BV80 - Thanks!

[peanutrs]

Was wondering if I wrapped my head around this.

 

Most CC, loans are made with a contract...written promise to pay.

 

When the "contract" is breached/violated, by either party,  it becomes invalid. (in those 18 states).

A new written contract must be redrawn and agreed to.

The date that the breached occured, is the date the SOL clock starts ticking.

So actually the date starts on the breach date, not the last payment made date.

As, if you made a payment after the breach, you made a payment on a invalid contract that is no longer enforceable. ?

 

So, that is why JDB's sue for breach of contract.

They are suing for the lump sum $ remaining because of the breach.

In those 18 states it is required that they (JDB's or OC) file lawsuit with the SOL limits starting from the first day of the breach of contract. . . ?

 

Others input on the following  example...

If I got a CC this month, and defaulted on the very first payment, next month....

The SOL would start pretty much immediately, even if I then payed on it for lets say 2 years... ?....! 

[BV80]

@peanutrs

 

I understand what you're getting at, but it depends upon your state laws.  If your state law says that a payment restarts the SOL, it doesn't matter when the breach occurred.  Some state laws say that a written promise to repay is required.  Well, a payment can be the same considered the same as a written promise. 

 

Also, in cc cases, a breach doesn't necessarily negate the entire agreement.  Using your argument, a default (late or no payment) would invalidate all of the terms of the agreement.  However, if you read a cc agreement, it states certain terms and conditions that apply if you make a late payment or fail to pay at all.  If you default, the agreement states that late fees can be assessed or the account can be cancelled.

 

If the entire agreement was ineffective due to your default, those terms would not apply.  But they do apply.

[admin]

 Well, a payment can be the same considered the same as a written promise. 

@BV80 - sure about this?  

[BV80]

@BV80 - sure about this?  

 

Yes.  If you send a check, that check has your signature.  That's an indication with your signature that you've acknowledged the debt.  Unless you can prove ID theft, how else could you argue it?

 

If a payment is made using another credit card or a bank debt card, I'm not sure.  I've read case law on the issue, but I didn't record the cases.

 

You always make me research, darn it!  

[admin]

Yes.  If you send a check, that check has your signature.  That's an indication with your signature that you've acknowledged the debt.  Unless you can prove ID theft, how else could you argue it?

 

That sounds like a little bit of a stretch to me.  Not that I would ever impeach your testimony, but I've honestly never heard of this.  

[BV80]

@admin

 

That sounds like a little bit of a stretch to me.  Not that I would ever impeach your testimony, but I've honestly never heard of this.  

 

You're not impeaching a testimony.  You're asking for an explanation or proof.  I do the very same thing.

 

I should have offered a better explanation.  A payment can be construed as acknowledgement that the debit is yours and as an implied promise to pay.   In other words, if the debt was not yours, would you make a payment?  Here's a couple of cases.

 

Because the record establishes that the payments implied "a promise to pay the remainder of the debt", they revived the debt "for limitations purposes."  SKANEATELES SAV v. MODI ASSOC, 239 AD 2d 40 - NY: Appellate Div., 4th Dept. 1998.


No acknowledgment or promise is sufficient evidence of a new or continuing contract by which to take the case out of the operation of this chapter, unless the same is contained in some writing, signed by the party to be charged thereby; but any payment of principal or interest is equivalent to a new promise in writing, duly signed, to pay the residue of the debt.  Idaho Code § 5-238. Where a debtor acknowledges a debt that has not yet been barred by the statute of limitations, a continuing contract is created because "the presumption is that he is an honest man, and means at some time in the future to pay [it]. The law, therefore, raises an implied promise to pay." COLLECTION BUREAU, INC. v. Dorsey, 249 P. 3d 1150 - Idaho: Supreme Court 2011 (quoting  Dern v. Olsen, 18 Idaho 358, 366, 110 P. 164, 167 (1910)).

[admin]

@BV80

 

It sounds like that's only Idaho, or that's all the case law you found...so far.     There are still plenty of instances where someone has paid a debt that was not theirs, so I'm not sure I agree with the reasoning.  

 

Also, if you pay by money order, you are not signing anything.  

[BV80]

@admin

 

Perhaps I'm reading this thread the wrong way.  There are some states that have ruled that once a debt is outside the SOL, a partial payment will not restart it.

 

Is that the issue you're addressing?

[admin]

Perhaps I'm reading this thread the wrong way.  There are some states that have ruled that once a debt is outside the SOL, a partial payment will not restart it.

 

Is that the issue you're addressing?

 

@BV80 Yes.  But also, I was always of the opinion that even if the SOL had not run that a partial payment would not restart the clock.  

[BV80]

@admin

 

I think this is dealing with contract law that might be state specific.  I know there are some states that have laws that state that a payment does not revive a debt that's already outside the SOL.  I honestly don't know if all states have the same ruling.  Otherwise, if a debt is not outside the SOL, there are states that have ruled a partial payment does extend (toll) the SOL from the date of the payment.  I know that's the case in my state.  Here's some case law from 2 other states:

 

A partial payment on a contract claim extends the statute of limitations to encourage settlement agreements without litigation. See id. Periodic partial payments on a debt may be made beyond the ordinary statutory limitation period without the creditor losing the right to pursue the unpaid balance.   Liberty Credit Services, Inc. v. Nancy Quinn (Wis.App. 2004) 688 N.W.2d 768, 770.

As we noted, the "partial payment" doctrine is a judicially recognized tolling doctrine based on the notion that by making a partial payment the debtor is both acknowledging the debt and impliedly promising to keep making payments.  Heidbreder v. Tambke, 284 S.W.3d 740 (Mo. App.2009).

 

Like I said, it's state specific. 

[BV80]

@admin

 

I researched a few more states to see how a partial payment affects the SOL.

 

Here's the law in my state.  It's clear as mud, actually.  I'm not sure if a partial payment will revive the SOL if it's already passed, but the law is clear that a partial payment will toll the SOL if it hasn't run.

 

South Carolina

SECTION 15-3-130. Suits on causes saved from bar of statute by part payment or written acknowledgment.

All actions upon causes of action which would be barred by the statute of limitations but for part payment or a written acknowledgment shall be brought on the original cause of action and the part payment or written acknowledgment shall be evidence to prevent the bar of the statute of limitations.

 

Alabama

Section 6-2-16
Sufficiency of partial payment or written promise to remove bar.

No act, promise or acknowledgment is sufficient to remove the bar to an action created by the provisions of this chapter, nor is such evidence of a new and continuing contract, except a partial payment, made upon the contract by the party sought to be charged before the bar is complete or an unconditional promise in writing signed by the party to be charged thereby.

 

Florida

95.051 When limitations tolled.—

(f) The payment of any part of the principal or interest of any obligation or liability founded on a written instrument.

 

 

Georgia

§ 9-3-112.  Payment or written acknowledgment equivalent to new promise


   A payment entered upon a written evidence of debt by the debtor or upon any other written acknowledgment of the existing liability shall be equivalent to a new promise to pay.

Kansas

"The principle upon which part payment extends the running of the statute is that the debtor intended by such payment to acknowledge and admit the greater debt to be due, and from which the trier of facts would be warranted in finding an implied promise to pay." Western Video Collectors, L.P. v. Mercantile Bank of Kansas, (1997).
 

 

In Indiana, even if the SOL has passed, a partial payment will revive it.

 

Indiana

As to the first issue, the Court finds that the long-established law of the State of Indiana holds for the premise that a single partial payment on a debt, even after the statute of limitations has passed, is sufficient to revive the debt and start the statute of limitations anew. Bartle v. JACKSON STREET INVESTORS, LLC, Ind: Court of Appeals 2012.

 

This just shows that we need to inform people to check their state laws to see how a partial payment will affect the SOL in their state.

[admin]

I think every state except 17 has laws that a partial payment restarts the SOL.  

 

Thanks for all the research!

 

@BV80 -

[Amerikaner83]

Figured I can add it here too...but for the record, a partial payment to an account does NOT reset the SOL in Washington...only payment that brings an account current restarts the SOL.

[S.S.D.D.]

Actually, there are 18 states in which payment does not restart the clock (review or extend SOL). The statute of limitations is only extended by new written promise to pay in these 18 states:

Arizona, California, Florida, Iowa, Kansas, Maine, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nevada, New York, Texas, Virginia, West Virgina, Wisconsin.

 

I am unable to find the statute for this in Minnesota. Can you point it out for me?

Thanks.

[BV80]

@S.S.D.D.

 

Here's the MN statute.  A payment doesn't restart the SOL if the SOL has already passed.

 

541.053 LIMITATION OF ACTIONS BASED ON CONSUMER DEBT.

Notwithstanding section 541.31, subdivision 1, actions upon an obligation arising out of a consumer debt primarily for personal, family, or household purposes shall be commenced within six years. After its expiration, the statute of limitations is not revived by the collection of a payment on an account, a discharge in a bankruptcy proceeding, or an oral or written reaffirmation of the debt.

[S.S.D.D.]

@S.S.D.D.

 

Here's the MN statute.  A payment doesn't restart the SOL if the SOL has already passed.

 

541.053 LIMITATION OF ACTIONS BASED ON CONSUMER DEBT.

Notwithstanding section 541.31, subdivision 1, actions upon an obligation arising out of a consumer debt primarily for personal, family, or household purposes shall be commenced within six years. After its expiration, the statute of limitations is not revived by the collection of a payment on an account, a discharge in a bankruptcy proceeding, or an oral or written reaffirmation of the debt.

 

Thank you, that's what I needed to know.

[pzm9zl1]

I need guidance. Sorry if this topic has been addressed......could not find it.

 

I had a house in Michigan. I had taken out a 2nd mortgage/home line of equity from 53rd bank (headquarted in ohio) on 2005. Because of financial distress, stopped paying in October, 2008.

 

In October 2010, completed a short sale on my home. The first mortgage holder bank agreed to give some money to the second mortgage holder bank (53rd). In turn 53rd agreed to let the sale continue but had the following language in the release letter: 

 

This letter confirms that Fifth Third Bank will accept $_________ on the above referenced charged-off account to release the lien on the above referenced property.  These funds are from proceeds generated from the "as is condition" purchase offer. Although Fifth Third Bank agrees to release the lien on the referenced account, the Account Holder and Fifth Third Bank both agree that any remaining debt is still owed and is collectable.

 

In other words, the funds to 53rd bank were paid from the proceeds collected from the buyer. I did not sign the release letter.

 

53rd is now suing me in florida as I stay in florida.

 

questions:

1) Can the bank use the Ohio laws as they would be most favourable from resetting the SOL beginning October, 2010?

2) If Michigan laws are used given that the property was in Michigan, does the SOL time period beginning reset to 2010 or it still stays at 2008?

3)  If Florida laws are used given that I am a Florida resident, does the SOL time period beginning reset to 2010 or it still stays at 2008?

 

Thanks very much in advance.

[Kb]

I am looking for some advice. In Nevada if a payment is made on a time barred debt does it revive the debt? I got threatened and made  payment on a 12 yr old debt...I feel so stupid. Thanks.

[Cabinboy]

Is there any Iowa Case Law showing payment BEFROE SOL runs out restarts SOL clock?   I realize this is an old post.

[BV80]

1 hour ago, Cabinboy said:

Is there any Iowa Case Law showing payment BEFROE SOL runs out restarts SOL clock?   I realize this is an old post.

From Gemini Capital Group v. New (Iowa Court of Appeals, 2011}

“Iowa Code section 614.1 sets forth the statute of limitations for various causes of actions. Generally, those founded on unwritten contracts must be brought within five years of the time they accrue. Iowa Code § 614.1(4). Those founded on written contracts must be brought within ten years. Id. § 614.1(5). With respect to continuous, open, accounts, "the cause of action shall be deemed to have accrued on the date of the last item therein, as proved on the trial." Id. § 614.5. There is no dispute the last payment on the account was made in June 2004.”