Do not be fooled by delinquent debt buyers

One of the nation’s largest consumer debt buyers, Asset Acceptance, LLC, agreed to pay a $2.5 million civil penalty to settle Federal Trade Commission charges that it made a range of misrepresentations when trying to collect old debts — Historic City News found some of those cases here in St Augustine and St Johns County.

If you have old debts, collectors may not be able to sue you to collect on them — that’s because creditors and their debt collectors have a limited number of years to bring the lawsuit; known as the statute of limitations.

The purchase of a debt by an investor, like Asset Acceptance LLC, does not restart, or lengthen, the amount of time in which the lawsuit may be brought. According to Florida law, a debt collector cannot sue you for not paying a debt that’s time-barred.

The statute of limitations on debt in Florida puts a limit on the amount of time your creditors can wait to bring a lawsuit against you, as follows:

Oral Contract: 4 years
Written Contract: 5 years
Promissory Note: 5 years
Open-Ended Accounts: 4 years

Be aware that we are talking about the time your creditor, or a debt collector, may take to first bring a lawsuit against you for money they claim is owed — not any post-judgment judicial remedies; which can continue even longer.

Also be aware that there is nothing wrong with asking you to pay all or part of a debt that is time barred; only implying or threatening that, if you don’t, your creditor is taking you to court — or worse, actually does take you to court; as was some of the cases with Asset Acceptance, LLC.

Another cautionary warning — if you are asked to pay a time barred debt, and you make even a partial payment, or sign an agreement reaffirming the debt, or an offer to settle the debt in one or more payments, you may very well be reopening the window of time in which your creditor can decide to sue you. This is tricky for consumers, and you should consult your attorney. Under certain circumstances, the clock can be reset and the time period can be started fresh.

Usually, the clock starts ticking when you fail to make a payment; when it stops depends on two things: the type of debt and the law that applies either in the state where you live or the state specified in your credit contract.

Specifically, collectors are allowed to contact you about time-barred debts. They should tell you that the debt is time-barred and that they can’t sue you if you don’t pay. But, even if they don’t, and you think that it might be — ask the collector if the debt is beyond the statute of limitations. Another question to ask is what their records show as the date of your last payment.

What should I do if I’m sued for a time-barred debt?

Defend yourself in court. If you’re sued to collect on a time-barred debt, pay attention, and respond. Consider talking to an attorney. You or your attorney should tell the judge that the debt is time-barred and, as proof, provide a copy of the verification from the collector or any information you have that shows the date of your last payment.

The lawsuit will be dismissed if the judge decides the debt is time-barred.

In any case, don’t ignore the lawsuit. If you do, the collector likely will get a court judgment against you, and possibly take money from your paycheck, bank account, or tax refund.