debtmanwalking

Restarting SOL in California

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Okay...desperate for a once and for all definitive answer regarding whether or not partial payments restart the statute of limitations in California.

I sent the following email to a number of debt lawyers in my state:

"I've been going nuts trying to find an answer to a question...and I'm optimistic that you'll have my answer. I've been dealing with a credit card debt that is well beyond the statute of limitations in my state (California). The debt has been passed on to several collection agencies over the years. I've paid thousands of dollars towards the debt in the form of monthly payments. The last written agreement I had is with the original creditor...from about 7-8 years ago...beyond the SOL. Is it true that in California...my recent payments and verbal acknowledgment of the debt over the phone DO NOT reset the statute of limitations clock? Does this mean that if I send the collection agency a cease and desist letter...that states that I'm disputing the debt due to exceeding the SOL...then they'll be forced to leave me alone? I realize that they could still try to sue...but will a judge throw out the case because I haven't entered into a new WRITTEN agreement (other than payments and phone conversations)...and I'm beyond the SOL? Desperate for a definitive answer."

Here are some of my responses:

Again...I'm in California

Lawyer #1 : "I believe that if you acknowledged there is a debt again then it resets the sol so they can sue"

Lawyer #2 : "Any voluntary payment revives the statute of limitations."

Lawyer #3 : "Payments you have made do toll the statute. But phone conversations do not."

Can I get a definitive, provable answer that California Civil Procedure Section 360 does or does not apply? And the following information from creditinfocenter.com regarding partial payments is or is not correct???

"Does a partial payment restart the SOL?

Depending on what state you live in, if you make a partial payment, you could be postponing the Statute of Limitations' taking effect on your collection account or charge-off. A collector might call you one day and say you waived your rights when you made a deal with the collection agency. Do not take anything a collector tells you for granted. Make them prove it to you, in or out of court. For about half the population, the Statute of Limitations started ticking the day they made the last payment for their account.

Some states have laws which specify that a partial payment does not restart the clock on the SOL, unless there is a new written promise to pay. What that means is that you actually write out a new agreement with the orginal creditor and/or collection agency. If you live in one of these states, simply sending in a check doesn't restart the clock. The statute of limitations is only extended by new written promise to pay in these states:

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

Again, desperate for a definitive answer that pertains specifically to California law. And...I'm not trying to flee from my financial responsibility. I've paid back the original debt in the form of monthly payments...just not the fictional and absurd interest. I've been dealing with the nightmare of these collectors for years...and I feel I deserve for it to finally be over.

Thanks for your help!

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1) In California the minute you make any payment, ( one dollar), it resets your SOL.

2) In California, agreeing to and signing a new payment plan resets the SOL.

The Slippery Slope on two is when they record your conversation on the phone and they trick you into accepting the debt and agreeing to a payment plan.

-----------

The most famous way to get a your SOL debt reset the old Credit Card offer that says things like.

"We know you have had some hard times, but don't dispare because were making you this great credit card offer to re-establish your credit."

If you read the fine print on these offers it states that what they will do is take your old debt and assign it to the new credit offer. The minute you do this it resets the SOL.

------------------------

In the future read all the Stickies.

The absolute first rule is to never, ever, speak to them on the phone.

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California Statutes of Limitation

Written agreements: 4 years, calculated from the date of breach.

Oral agreements: 2 years.

The statute of limitation is stopped only if the debtor makes a payment on the account after the expiration of the applicable limitations period.

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Thank you both for taking the time to respond...I appreciate it. So you're telling me that the educational information on this website (creditinfocenter) is completely incorrect? At the top of this page...you can click on "statute of limitations"....and then scroll down to the paragraph titled "Does a partial payment restart the SOL?"

It then states that...

"Depending on what state you live in, if you make a partial payment, you could be postponing the Statute of Limitations' taking effect on your collection account or charge-off. A collector might call you one day and say you waived your rights when you made a deal with the collection agency. Do not take anything a collector tells you for granted. Make them prove it to you, in or out of court. For about half the population, the Statute of Limitations started ticking the day they made the last payment for their account. Some states have laws which specify that a partial payment does not restart the clock on the SOL, unless there is a new written promise to pay. What that means is that you actually write out a new agreement with the original creditor and/or collection agency. If you live in one of these states, simply sending in a check doesn't restart the clock. The statute of limitations is only extended by new written promise to pay in these states: Arizona, California, Florida, Iowa, Kansas, Maine, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nevada, New York, Texas, Virginia, West Virgina, Wisconsin."

So you're both telling me that the information on this website is completely inaccurate in regards to California? Thanks again.

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I think that you need to access a more thorough data base of CAli law. if you can't see it online, i would go to your library

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What I have been able to find is the following:

CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 360

"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 title, unless the same is contained in some

writing, signed by the party to be charged thereby, provided that any

payment on account of principal or interest due on a promissory note

made by the party to be charged shall be deemed a sufficient

acknowledgment or promise of a continuing contract to stop, from time

to time as any such payment is made, the running of the time within

which an action may be commenced upon the principal sum or upon any

installment of principal or interest due on such note, and to start

the running of a new period of time, but no such payment of itself

shall revive a cause of action once barred."

(found on Onecle)

But what nobody has been able to tell me for sure...is whether or not this directly applies to credit card debt...and means that I need a new written agreement no matter what I've paid during or after the SOL has expired.

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Hi the information provided on this site is accurate as to the sol per the state of california however if you choose to initiate a partial payment than you are restarting the sol on your debt.

You could however write on each payment sent that the payment of this alleged debt does not consititute you re starting the sol over or if you resign a contract with them have that in the clause

or just consult an attorney to have them interact on your behalf as a mediator for you.

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The analysis isnt that easy. In California you would get sued on an open book account and the statute is calculated from your last payment. You can't do a strict contract analysis and get a straight answer. It is fact and debt specific. get a lawyer.

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My interpretation is that a partial payment does not reset - but you'd need case law to back it up.

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Hello Debmanwalking,

I have the same question and have been sued (but not yet served) a couple weeks ago. The SOL has passed in my case *unless* a partial payment resets the SOL, obviously this is an important question.

Thanks in advance.

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I believe I found the relevant case law. A partial payment does not reset the SOL. Additionally the SOL starts when the account is closed, or more specifically, when no more charges are allowed by the creditor.

R.N.C., Inc. v. Tsegeletos (1991) 231 Cal.App.3d 967 [283 Cal.Rptr. 48]

...a book account like any open account becomes closed once the account creditor ceases to extend credit and there will be no further activity on the account other than the payments by a creditor towards the settled debt.

...

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So in short, in California, only payments made through a written contract re-ages the statute of limitation and any verbal acknowledgment of that debt even after the statute of limitations has passed will not re-start the SOL in question?

I have 2 other accounts that went into collection, both of which have a reported first date of delinquency in 2006. Based on that year, both accounts would have already gone past through the SOL in California. I know I have a moral obligation to pay those debt but I just want to be given time with no pressing stress from any civil judgment.

I was already given notice of levy and recordation of involuntary property lien and that debt collector representing the company who bought my account from the original creditor offered me a settlement recently. Any advice on how to frame the conditions of a well-written agreement?

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Credit911, I believe you are saying that you have 3 debts. Two are past the SOL and one debt went to court and you lost, and you now want to make an agreement with the debt collector that won in court?

If the debt collector won a levy against your wages or a property lien on your house then there's not much incentive for him to take less money, unless you don't have a job or a house. In that case you can offer less and let the debt collector know that you are considering filing bankruptcy if he won't take less, worst case is they say no. If I were a debt collector and I truly believed you might really file bankruptcy then I'd personally take less.

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Credit911, I believe you are saying that you have 3 debts. Two are past the SOL and one debt went to court and you lost, and you now want to make an agreement with the debt collector that won in court?

If the debt collector won a levy against your wages or a property lien on your house then there's not much incentive for him to take less money, unless you don't have a job or a house. In that case you can offer less and let the debt collector know that you are considering filing bankruptcy if he won't take less, worst case is they say no. If I were a debt collector and I truly believed you might really file bankruptcy then I'd personally take less.

Yea. I already settled with them so let's see until the last payment is cleared.

By the way, what do you think about my SOL question? Does verbal acknowledgement of debt re-ages the SOL or only written contracts in California and payments made re-ages SOL?

There was not a clear consensus in this thread about it or perhaps I missed it since I was a new member.

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According to the CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 360, only a written agreement re-ages the SOL (see several posts up).

Not that it matters, but was your verbal "agreement" recorded? Note that is is illegal in California to record a telephone conversation without your knowledge. This means that if someone says, "this conversation will be recorded for quality assurance purpose", and then you say that you do not consent to recording, then you *have* been notified and can be recorded (albeit without your consent). Anyway even if you told the debt collector to verbally record your conversation it doesn't matter and does not hurt you.

Edited by genesplitter

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According to the CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 360, only a written agreement re-ages the SOL (see several posts up).

Not that it matters, but was your verbal "agreement" recorded? Note that is is illegal in California to record a telephone conversation without your knowledge. This means that if someone says, "this conversation will be recorded for quality assurance purpose", and then you say that you do not consent to recording, then you *have* been notified and can be recorded (albeit without your consent). Anyway even if you told the debt collector to verbally record your conversation it doesn't matter and does not hurt you.

I see. If they were recording it on their end, can I also record it without them knowing since they themselves are recording it already? I have been recording since we started discussing about the settlement offer for my records purposes.

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I'm not sure, but I don't think it actually matters. The only reason to record anything written or verbal is as evidence in a lawsuit. If they don't sue you then their recordings just sit in a file. If you are sued then you can request their documents, including their recordings. Go ahead and keep recording as you have as there is no harm in it.

BTW - why not have an agreement in writing instead of verbally recording phone calls? Seems like a good way to get milked over the next several years.

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I'm not sure, but I don't think it actually matters. The only reason to record anything written or verbal is as evidence in a lawsuit. If they don't sue you then their recordings just sit in a file. If you are sued then you can request their documents, including their recordings. Go ahead and keep recording as you have as there is no harm in it.

BTW - why not have an agreement in writing instead of verbally recording phone calls? Seems like a good way to get milked over the next several years.

Oh, it will be in writing. Thanks for patiently responding!

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What I have been able to find is the following:

CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 360

"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 title, unless the same is contained in some

writing, signed by the party to be charged thereby, provided that any

payment on account of principal or interest due on a promissory note

made by the party to be charged shall be deemed a sufficient

acknowledgment or promise of a continuing contract to stop, from time

to time as any such payment is made, the running of the time within

which an action may be commenced upon the principal sum or upon any

installment of principal or interest due on such note, and to start

the running of a new period of time, but no such payment of itself

shall revive a cause of action once barred."

(found on Onecle)

But what nobody has been able to tell me for sure...is whether or not this directly applies to credit card debt...and means that I need a new written agreement no matter what I've paid during or after the SOL has expired.

Translation: Before SOL has run out, ANY payment re-starts the SOL clock. After SOL has run out, it doesn't. It applies to ANY debt, Credit Cards included.

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I am using this case as my defense from a junk debt collector lawsuit (filed a couple weeks ago).

R.N.C., Inc. v. Tsegeletos(1991) 231 Cal.App.3d 967 , 283 Cal.Rptr. 48

In my case, my credit card account account was closed and full payment demanded over 5 years ago. There was a partial payment 4 years ago. The junk debt collector filed the case a couple days under the 4 year deadline, assuming you count 4 years from the date of last partial payment.

I appear to be a perfect test case to settle this question once and for all. I'll update this thread periodically. Right now I'm still waiting to be served. I know I was sued because I was keeping an eye on the newly filed court cases as my 4 year deadline approached.

Edited by genesplitter

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