Do you have old credit card debt or outstanding loans? Do you want to move
forward with your life but are unsure how these debts will affect your
finances in the future? Consumers who owe a debt are given protections
under the law which limit the amount of time a creditor can legally collect
on a debt owed. This time limit is known as the statute of limitations
(SOL) and in New York State, a creditor typically has 6 years to sue a
debtor in order to collect a debt. However, the time a creditor has to
collect under the SOL can be shortened or extended based on the circumstances
surrounding the debt.
Generally, the six-year time limit will apply in cases where:
- A breach of contract has occurred
- The debtor has not made or agreed to additional payments
- The creditor resides within New York State.
Lawsuits are commonly brought against debtors for a breach of contract,
which occurs when either party engages in behavior which violates the
terms of an agreement, such as when a debtor stops repayment. However,
the legal clock for the SOL begins on the date of the last made or agreed
upon payment, not when the debt was originally incurred. For example,
if you (a debtor) defaulted on a loan in 2010 but made a payment in 2012,
the statute of limitations will allow a creditor to collect until 2018.
For these reasons, it is vital for debtors to take care when dealing with
creditors and have a legal plan of action for dealing with a debt.
The statute of limitations can also be influenced by the physical location
of the creditor. New York courts have ruled that lawsuits filed by creditors
located in another state will be governed by the statute of limitations
of the creditor’s home state. Many states have a SOL period considerably
shorter than that of New York. Delaware, for example, has a SOL of three
years for cases of breach of contract and institutions located within
that state might not be able to pursue legal action after that time, even
when the debtor lives in New York.
The SOL can effect a creditors ability to bring a
lawsuit for credit cards, medical bills, automobile deficiency balances, and most
private student loans. However, it is important to note that most government-back student loans
are not governed by the Statute of Limitations.
Are You Seeking Relief from Debt? Call (888) 301-0584
Have you been contacted by a creditor looking to collect on an old debt?
Our New York debt relief attorney has years of experience helping clients
to find the debt relief solutions which best work for their situation.
Do not engage with a creditor or collections agency without first consulting
with a knowledgeable attorney from our firm. Whether you are considering
debt settlement, restructuring, bankruptcy, or simply do not know where
to begin, look no further than the Law Office of Simon Goldenberg, PLLC.
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