Debt Defenses: Statute of Limitations

Most people give up when they are sued by a debt collector. Do yourself a favor and don’t take this course of action. There are valid defenses to debt-collection lawsuits.

There are a number of defenses that can be used in these types of cases. One of these defenses is the statute of limitations defense. As with any type of lawsuit, there is a prescribed period of time that a lawsuit can be brought against another person or entity.

Make sure the collector sued you within the statute of limitations on the debt. For example, in Mississippi, there is a three-year statute of limitations for credit card debt. The three years is from the date you last used the card or the last time you made payment. If the collector sues you after three years from this date, you will have the defense that the statute of limitations has run. (This is why creditor or collectors always attempts to get you to make a payment on the debt so the statute of limitations can be reset.) If the collector sued you after the statute of limitations you may have a suit against it under the Fair Debt Collection Practices Act. There are different statutes of limitations on different types of debt. You need to find out what the statute of limitations is on that particular type of debt.

Why do collectors file suit even when the statute of limitations has run? Simple, in most states, if a collector sues outside the statute of limitations, the debtor or person has the duty to raise the defense that the statute of limitations has run. If he does not, then the collector can get a judgment.

In Mississippi, a debt that was not filed for within the statute of limitations is actually extinguished under Mississippi Code Ann. § 15-1-3. The debt no longer exists; however, collectors can still get a judgment if the person fails to raise this defense. Whether those judgments are legal is a debate for another day. Always consult a lawyer prior to just allowing a collector to obtain a judgment against you. You need to know the type of debt and its statute of limitations.