Time’s Up?

The ins and outs of collecting out-of-statute debt.

11/4/2019 7:30 AM

NewsStateCollector Magazine
Time’s Up?

The concept of a statute of limitations is widely used throughout the U.S. legal system. A statute of limitations establishes a time limit for bringing a legal action or enforcing legal rights based on the date when a claim accrued.

For the purpose of consumer debts, a statute of limitations governs the amount of time during which a legal remedy (typically a lawsuit) may be sought by the party that owns the debt or that party’s agents. Notably, if a suit is brought after the expiration of the limitations period, it may be seen as a violation of Section 1692e(5) of the Fair Debt Collection Practices Act, which prohibits, in part, the threat to take any action that cannot legally be taken.

However, under the FDCPA and most state laws, the expiration of a statute of limitations does not actually extinguish the underlying debt. While a suit may no longer be filed to collect the debt, courts have found that collection efforts such as phone calls and letters may continue, provided a suit is not filed and there are no threats of litigation or other legal action.

A number of state legislatures have examined the issue of collecting out-of-statute debts in recent years.

Some states have enacted disclosure requirements that must accompany collection attempts related to out-of-statute debts. The requirements vary by state, but all share the same goal of notifying the consumer that the debt is beyond the applicable timeframe for pursuing legal action or enforcement.

Read more on state-specific laws in the October issue of Collector magazine.

For an in-depth analysis of the federal and state laws related to collectingdebts that are beyond the statute of limitations, ACA members can review the recently updated ACA SearchPoint document #1119, Statutes of Limitation: Collecting Out-of-Statute Debt.

For general information on state statutes of limitation, see ACA SearchPoint document #1122, Statutes of Limitations.

For information on settlement offers, including offers on out-of-statue debts, members can access ACA SearchPoint document #1142, Settlement Offers.

ACA SearchPoint is filled with documents that put important compliance information related to the FDCPA, FCRA, TCPA, state laws and many other topics at your fingertips.

Subscriptions to the Collector magazine digital edition and email notifications for each new issue are available for ACA International members by logging in to ACA International’s website here. Members and nonmembers can also purchase a print subscription. Nonmembers can create a guest profile on ACA’s website to subscribe to available publications.


Follow ACA International on Twitter @ACAIntl and @acacollector, Facebook and request to join our LinkedIn group for news and event updates. ACA International members are welcome to submit news items for possible publication to comm@acainternational.org. Visit our publications page for news submission guidelines and subscriptions to ACA Daily, Collector magazine and Pulse.

Advertising is available for companies wishing to promote their products or services. Be sure to visit the ACA Events Calendar on the Education and Training page to view our listing of upcoming CORE Curriculum and Hot Topic seminars featuring critical educational opportunities for your company.


Subscribe to ACA Daily NEWSROOM

Time’s Up?

The concept of a statute of limitations is widely used throughout the U.S. legal system. A statute of limitations establishes a time limit for bringing a legal action or enforcing legal rights based on the date when a claim accrued.

For the purpose of consumer debts, a statute of limitations governs the amount of time during which a legal remedy (typically a lawsuit) may be sought by the party that owns the debt or that party’s agents. Notably, if a suit is brought after the expiration of the limitations period, it may be seen as a violation of Section 1692e(5) of the Fair Debt Collection Practices Act, which prohibits, in part, the threat to take any action that cannot legally be taken.

However, under the FDCPA and most state laws, the expiration of a statute of limitations does not actually extinguish the underlying debt. While a suit may no longer be filed to collect the debt, courts have found that collection efforts such as phone calls and letters may continue, provided a suit is not filed and there are no threats of litigation or other legal action.

A number of state legislatures have examined the issue of collecting out-of-statute debts in recent years.

Some states have enacted disclosure requirements that must accompany collection attempts related to out-of-statute debts. The requirements vary by state, but all share the same goal of notifying the consumer that the debt is beyond the applicable timeframe for pursuing legal action or enforcement.

Read more on state-specific laws in the October issue of Collector magazine.

For an in-depth analysis of the federal and state laws related to collectingdebts that are beyond the statute of limitations, ACA members can review the recently updated ACA SearchPoint document #1119, Statutes of Limitation: Collecting Out-of-Statute Debt.

For general information on state statutes of limitation, see ACA SearchPoint document #1122, Statutes of Limitations.

For information on settlement offers, including offers on out-of-statue debts, members can access ACA SearchPoint document #1142, Settlement Offers.

ACA SearchPoint is filled with documents that put important compliance information related to the FDCPA, FCRA, TCPA, state laws and many other topics at your fingertips.

Subscriptions to the Collector magazine digital edition and email notifications for each new issue are available for ACA International members by logging in to ACA International’s website here. Members and nonmembers can also purchase a print subscription. Nonmembers can create a guest profile on ACA’s website to subscribe to available publications.


Follow ACA International on Twitter @ACAIntl and @acacollector, Facebook and request to join our LinkedIn group for news and event updates. ACA International members are welcome to submit news items for possible publication to comm@acainternational.org. Visit our publications page for news submission guidelines and subscriptions to ACA Daily, Collector magazine and Pulse.

Advertising is available for companies wishing to promote their products or services. Be sure to visit the ACA Events Calendar on the Education and Training page to view our listing of upcoming CORE Curriculum and Hot Topic seminars featuring critical educational opportunities for your company.


Subscribe to ACA Daily NEWSROOM

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