The statute of limitations on debt refers to the period of time during which creditors can legally take you to court for failing to meet your debt obligations. After the statute of limitations on your debt has expired, you are still legally responsible for paying back your debt, but federal law under the Fair Debt Collection Practices Act bans debt collectors from winning a judgment against you in court. If your creditors violate this law, you are entitled to a file a complaint and sue them, but before you can do that you must first determine whether or not the statute of limitations on your debt has expired.
|Oral Contract||10 years|
|Written Contract||10 years|
|Promissory Note||10 years|
|Open Accounts||10 years|
There are multiple kinds of debt, each with their own special statute of limitations. The four major types include oral contracts, written contracts, promissory notes, and open-ended accounts. Additionally, each state has its own statutes of limitation for the different kinds of debt. To determine when your debt’s statute of limitations has expired, you must know which state’s limits apply to your debt. Each state’s statutes of limitations apply to all agreements entered into in that state and to all agreements made by current residents of that state (even if they were signed in another location), and the longest statute will likely be the one your creditor will look towards in court.
Please note that since this article pertains to the particulars of the statute of limitations on debt in Rhode Island, the following information is applicable to all debt agreements entered into in the state of Rhode Island, as well as the agreements made by current residents of the state made outside of Rhode Island. For oral contracts, written contracts, promissory notes, open-ended accounts, and many other types of consumer debt that does not fall under one of these categories, the statute of limitations is ten years. For student loans and unpaid income taxes, there is no statute of limitations. Finally, making payments to creditors after the statute has expired may reset the clock in some cases.
On a final note, remember that although the expiration of the statute of limitations on debt makes it illegal for debt collectors to take you to court to force you into repayment of your loan, they can still harass you over the phone and by mail until they have been repaid. Additionally, if you receive a summons to court regarding your debt after the expiration of your statue, SHOW UP. Failure to do so can result in your losing the case, which then can lead to wage garnishment, levying of your bank accounts and liens on your property. Finally, it will be up to you to prove that the statute of limitations has expired on your debt since the person suing you will not volunteer that information, so go to court prepared with the proper paperwork and records of your payments.
At The University of North Carolina Wendy plans to actively participate in a student group, Health Focus, which will enable her to use her knowledge and love for health and nutrition to educate youth in the Chapel Hill/Carrboro area. She also hopes to promote voter registration amongst her fellow students.
Latest posts by Wendy Clay (see all)
- Statute of Limitations on Debt in Florida - October 14, 2014
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- Statute of Limitations on Debt in Rhode Island - September 10, 2014