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.