When a consumer owes you money, it is important you make efforts to collect the debt within a reasonable amount of time. Debt collection can be a slow and frustrating process, but if you fail to do your part to make collection in a timely manner, you may lose your chance to collect altogether. Time-barred debts are debts that require you, the lender, to sue within the statute of limitations determined by the laws in your state.
What Types of Debt are Time-Barred?
Many different kinds of debt fall under a statute of limitations, but depending on the type of debt, the rules may vary greatly. A closed-end credit, or a single credit transaction like a house loan or a car loan, typically have a strict statute of limitations that is directly related to the date on the original promissory note. In comparison, and open-end credit, or a loan with multiple transactions, like a credit card, may not have a strict statute of limitations because of the flexible nature of the account.
Determining the Statute of Limitations
The statute of limitations is based on when payment of the debt was due. So, for most debts this is based on the due date of the first payment. The statute of limitations is different in every state, for Georgia the statute of limitations is 6 years for a written contract.
Suing for Unpaid Debt
If the conventional methods of debt collection have been fruitless, your company may need to hire a collection attorney and pursue a debt collection lawsuit. An experienced lawyer can work with you to quickly collect the money owed, avoiding the risk of missing your chance to collect within the statute of limitations.
The lawyers at Howe & Associates Debt Collection Attorneys have experience working with lenders of all kinds to collect unpaid debt, click here or call 678-566-6800 to learn more.