HOW LONG CAN A DEBT COLLECTOR PURSUE AN OLD DEBT?
This is a general outline is provided by ROBERT J. ADAMS & ASSOCIATES. Offices in Chicago and Waukegan, Illinois. The primary practice of ROBERT J. ADAMS & ASSOCIATES is Chapter 7 and Chapter 13 Bankruptcy.
Private creditors have a limited amount of time to collect debts. Who are private creditors? Examples include credit card companies, those collecting for medical bills; finance companies. Essentially, not a government entity or collecting on student loans.
NOTE: When a creditor has filed a lawsuit the Statute of Limitation is a defense. If not asserted as a defense the creditor will likely get a valid judgment.
Common Time Limits:
- In general, written contracts (see footnote)1: 10 years
- Oral contracts: 5 years
- Sale of goods (furniture, natural gas): 4 years
- Store Credit: 4 years
- Credit cards in Illinois: 4 years
- Bad check penalties: 2 years; Checks other than bad debt penalties: 3 years
- Money judgments: 7 years but can be revived up to a total of 27 years. But new judgments 20 years
- Parking tickets and red light tickets: does not seem to have any time limit.
- Student loans: no time limit.
When does the clock start running? The date of default or the last date a payment was made: whichever is later.
When an individual has filed Chapter, the client’s lawyer cam object to any claim that is time barred.
A few things to consider when a debt is “written off”:
- A “written off” debt is neither forgiven nor is uncollectible.
- A credit or a collection agency or a “debt buyer” can still sue you. But, it does not extend the Statute of Limitation.
- A “written off” or “charge off” debt can be on your credit report for seven (7) years. That 7 year period starts 180 days after the debt first becomes delinquent, and is not extended by later payments.
Attempting to collect a time-barred debt MAY violate the Fair Debt Collection Practices Act, if:
- a settlement or payment plan is offered, or
- if the attempt is misleading,
- Contact a consumer attorney and have them review the letters you received. This should not cost you anything.
Footnote: The odd Illinois definition of written contract (all material terms are in writing and not subject to change except by another signed writing).1
Citizen’s Nat. Bank of Decatur v. Farmer, 77 Ill.App.3d 56, 395 N.E.2d 1121 (4th Dist. 1979)