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Understanding Time-Barred Debts

When a consumer owes you money, you must make efforts to collect the debt within a reasonable amount of time. Debt collection can be slow and frustrating. In addition, if you fail to do your part to make collection in a timely manner, you may lose your chance to collect altogether. Time-barred debts are debts that require the lender to sue within the statute of limitations determined by the laws in your state.

Types of Time-Barred Debts

Many different kinds of debt fall under a statute of limitations. However, depending on the type of debt, the rules may vary greatly. A closed-end credit, or a single credit transaction like a house loan or a car loan, typically have a strict statute of limitations. This limitation is directly related to the date on the original promissory note. In comparison, and open-end credit, or a loan with multiple transactions, like a credit card, may not have a strict statute of limitations because of the flexible nature of the account.

Determining the Statute of Limitations

The statute of limitations on time-barred debts is based on when payment of the debt was due. So, for most debts this is based on the due date of the first payment. And, the statute of limitations is different in every state. In Georgia, the statute of limitations is 6 years for a written contract.

Suing for Unpaid Debt

If conventional collection methods haven’t worked, you may need to hire a collection attorney. The attorney can help you pursue a debt collection lawsuit. Most importantly, an experienced lawyer can work quickly to collect on time-barred debts. And this helps you avoid the risk of missing your chance to collect within the statute of limitations.

The lawyers at Howe & Associates Debt Collection Attorneys have experience collecting unpaid debt. Click here or call 678-566-6800 to learn more.