Debt Collection And The Statute Of Limitations In Pennsylvania
Getting calls from debt collectors can become an overwhelming ordeal, especially when the calls come daily and are harassing. The callers make many different claims about the status of a person’s debt, and the actions the debt collection agency can take to collect the debt. While some of these collection actions may be possible, some are just empty threats meant to scare people into making payments.
In some cases, the consumer may not even legally owe on the debt anymore, and the debt collector is counting on the fact that the consumer does not know this in order to threaten him into making payments. This often happens with debts that are past the statute of limitations.
In Pennsylvania, this statute of limitations on collecting most commercial debts is four years, and applies to a person or company who later purchases the debt from the original creditor. Most debt collectors who engage in harassing and threatening calls have bought the debts from the original creditor. By the time the debt is sold to the debt collector, the time to file a lawsuit to collect on the debt has passed.
Once a statute of limitations has passed on a debt, and the creditor can no longer collect the debt by suing, the debt essentially becomes uncollectable because it is time barred. The collector can still file the lawsuit, but the consumer would have a good defense against it, and the lawsuit would be dismissed before it got too far. If the consumer is sued, even on a debt that is past the statute of limitations, the consumer must respond to the lawsuit and assert the defense. If not, the creditor could get a judgment, even if the statute of limitations has passed because there is no one there to fight it.
However, there are some things a consumer can do to resurrect the debt. One way is by making new payments or entering into a new agreement to make payments after the statute of limitations has expired. This is why a common tactic to restart the statute of limitations is for a debt collector to call and threaten to sue the consumer unless he starts making payments. Once the consumer makes payments, the statute of limitations starts anew and the debt collector can file a lawsuit to collect on it.
The statute of limitations is calculated from the time of the last payment made on the debt. Therefore, if the last payment on the debt was made in 2010, the statute of limitations on that debt in Pennsylvania would generally be in 2014. To confirm when the last payment was made, consumers can check their credit reports and financial records.
In some cases, the credit agreement the consumer signed with the creditor may have stated that the law of another state would govern when it comes to issues like these. In that case, the statutes of limitations may be longer.
Contact Us for Further Assistance
If you are being harassed by debt collectors, do not take any actions that could revive a debt that the law says cannot be collected. Contact Louis S. Schwartz and his team at ConsumerLawPa.com to speak to a debt collector abuse attorney today.