A Bankruptcy Lawyer in Lawrence, KS can Defend you Against Creditors
If you owe money for a loan, credit card or other type of debt, your creditors are bound by the statute of limitations and they only have a certain amount of time to sue you. The clock starts ticking when the agreement is broken–when you quit making payments, cause a lapse of insurance on collateral, or when you commit any other act that forces the creditor to enforce the contract. In this article, you will learn more about the statute of limitations and how it can affect your bankruptcy case.
Debt Types and the Statute of Limitations
The length of time in which a creditor can sue you depends on state law and your debt type.
* Written contracts include promissory notes, credit card contracts and other written agreements for loans. Statute of limitations applies to any written credit agreement.
* Oral agreements are promises to pay that aren’t put into writing; they can also exist if a creditor claims that you owe based on a previous verbal agreement. The oral agreement statute of limitations is shorter than that for written contracts.
* Open credit card accounts: Some states set credit cards apart from other written contracts, instead classifying them as revolving or open-ended accounts. In such states, the statute of limitations is different, but some states give creditors the choice to treat the account like a written contract (which extends the statute of limitations).
* Installments: If you ever buy something on an installment plan, the statute of limitations is likely to differ. Installment agreements are different from credit card contracts in that your creditor is the store where you made the purchase, instead of a third party such as a bank. If the statute applies at all, it’s usually shorter than for written contracts.
Creditors Can Sue After Time Has Expired
Even if the statute of limitations is expired, you can still be sued by creditors. If you are sued, your Bankruptcy Lawyer Lawrence, KS can use the statute of limitations as a defense; if not, you’ll face a judgment for a debt that’s unenforceable.
Law concerning the statute of limitations on debt changes often. If you’re facing legal action from one or more of your creditors, you should learn more about your state’s laws, and call a bankruptcy lawyer Lawrence, KS as soon as possible.