Can You Be Sued After the Statute of Limitations Has Passed?

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One of the ways creditors and debt collectors get consumers to pay their debts is by filing a lawsuit. If the judge finds in the creditor's favor, the court can order consumers to pay back the debt. Creditors and debt collectors can even garnish wages to satisfy the debt, but they only have a certain amount of time that they can sue you.

The statute of limitations is a law that limits the amount of time a debt is legally enforceable. After the statute of limitations for the debt has expired, the creditor cannot use the court to force a consumer to pay the debt. The time for the statute of limitations starts ticking on the last date of activity on the account and lasts anywhere from three to 15 years depending on the state you lived in when you created the debt and the type of debt.

Learn more about statutes of limitations and how they work.

Can You Be Sued After the Statute of Limitations Expires?

Technically, it's against the law for debt collectors to sue or even threaten to sue you for a time-barred debt, which is a debt whose statute of limitations has expired. That doesn't necessarily mean you won't be sued. A collector might sue you anyway if they believe that the statute of limitations hasn't passed. For example, their records may show a more recent date of last activity than what you have. Some dishonest collectors may sue under the assumption that you can't prove that the statute of limitations has passed or that you won't show up to court to plead your case.

If you're wondering whether the statute of limitations has passed on a debt, you may be able to ask. The Federal Trade Commission required one large collection agency, Asset Acceptance, to inform debtors when the statute of limitations has expired. Not all collection agencies will do this automatically, but you do have the right to ask if the statute of limitations has passed. If the agency responds, they must answer truthfully.

Be careful that you don't make any payment, payment arrangements, or promises to pay. Otherwise, you could accidentally restart the statute of limitations.

You Can Still Be Contacted About the Debt

While creditors and collectors may not be able to sue you for a time-barred debt, they can continue other collection efforts like calling you, sending letters, and reporting the debt to a credit bureau if it's still within the credit reporting time limit. If the debt is tied to a piece of property, like a title loan secured by a vehicle, the creditor may have the legal right to take possession of that property.

What To Do If You Are Sued

If you're served with a lawsuit summons, it's best to contact an attorney with experience dealing with creditors and debt collectors. That way, you're fully aware of your rights and have a legal representative in court.

Do not ignore the lawsuit summons, even if you believe the statute of limitations has passed. Failure to appear in court could lead to a default judgment being entered against you, and you will automatically owe the debt. You must show up to court and provide proof showing the statute of limitations has passed to have the judge find in your favor and dismiss the debt.

If you are sued and can show proof that the statute of limitations on the debt has expired, it's likely the case will be dismissed. Keep records for all your debts, even ones you haven't paid and even if you believe the threat of a lawsuit has passed. If you're ever faced with a lawsuit, these documents will play a key role in your defense.

Key Takeaways

  • A statute of limitations is how long a debt is legally enforceable.
  • While it's technically against the law to be sued for a debt outside the statute of limitations, it doesn't mean you won't be sued.
  • If you're sued, consult an attorney.
  • Keep records of all your debts in case you need to prove the statute of limitations has passed.