Question: When does the clock start to tick on the statute of limitations on debt? I originally leased a car while living in Georgia. In 2007 I entered into a rehab facility and stopped making payments on June 2007. In January 2008 I then moved to California, (my original home of residence).
Now, a law firm in Sacramento, CA is attempting to sue me for my past debt. When I was notified, I called and explained to them my understanding is that the statute of limitations is already expired since I live in CA and CA Law is 4 years. The law firm strung me along for two weeks, never calling me back after numerous phone calls on my part.
Now, they come back and are saying that the period I lived in Georgia did not count towards the Statue of Limitations. The clock didn’t start ticking until I moved back into California in 2008. Is this correct and if so what are my options?
Answer: Read Statute of Limitations on Debt. In that article I give an example of how to calculate when the clock starts to tick on the statute of limitations on debt. The statute of limitations definitely does not re-start when you move from state to state. Can you imagine, consumers would be legally saddled with old debt in perpetuity.
You need legal advice and I am not an attorney; however, I can offer the following:
1. An unpaid debt can does not go away just because the statute of limitations has ended. A junk debt buyer can always pursue you for the debt; however, the statute of limitations protects you from being legally sued for the debt. Basically, after the statute of limitations has passed the debt is uncollectible, unless you just want to pay it.
2. Section § 811 of the Fair Debt Collection Practices Act addresses this issue:
§ 811. Legal actions by debt collectors
(a) Any debt collector who brings any legal action on a debt against any consumer shall—
(1) in the case of an action to enforce an interest in real property securing the consumer’s obligation, bring such action only in a judicial district or similar legal entity in which such real property is located; or
(2) in the case of an action not described in paragraph (1), bring such action only in the judicial district or similar legal entity—
(A) in which such consumer signed the contract sued upon; or
(B) in which such consumer resides at the commencement of the action.
In my option, the FDCPA makes it easy for debt collectors to sue you in either the state where the contract was signed or the state where you currently reside. I have no doubt the debt collector will choose the state where the statute of limitations is longest.
For example, you now live in California where the statute on contracts in 4 years. However, you signed the contract in Georgia where the statute of limitations is 6 years. The debt collection law firm can choose to bring a legal action against you in California or Georgia. They will probably use the Georgia statute of limitations but that does not mean the statute has re-started simply because you moved to California.
It is not wise to communicate over the telephone with a debt collector. You may say or do something that can actually re-start the statute of limitations such as making a payment, promise to pay or acknowledging the debt is yours.
Send a certified, return receipt letter to the debt collector requesting communication be in writing only as telephone calls to your home, work or cell phone are inconvenient. You need to create a paper trail and conducting communications in writing is the only way to do this.
It really would have been rich for the debt collection law firm to actually put in writing “…the period you lived in Georgia did not count towards the Statue of Limitations.” This would be comical if the subject matter were not so serious. Contact an attorney if you are not comfortable handling this matter. Naca.net has a list of consumer law attorneys well versed in the FDCPA. The best of luck to you.