FindLaw KnowledgeBasePublished: 2012-04-11
Since the Great Recession, individuals of all ethnicities have taken on an increasing amount of debt to make ends meet. Some of these people will be unable to repay their debts, which will prompt creditors to call, write letters and eventually sue to collect what is owed. Fortunately, most states have a statute of limitations on debt collection that can be a lifesaver for people struggling with debt.
The statute of limitations on debt in the Volunteer State is six years. This means that if a debt has not been repaid in six years, lenders cannot sue to collect the debt. However, there are several important nuances in the law that debtors should be aware of before placing their hopes of financial freedom on the statute of limitations.
The statute of limitations on debt only protects debtors from being sued by creditors. It does not erase the existing debt. Debt is only erased by repayment or bankruptcy. After the statute of limitations has passed, creditors can still attempt to collect the debt through phone calls and letters.
It is also possible to restart the clock on the statute of limitations on debt. The statute of limitations starts once activity on the account stops. Using a credit card or, in some states, even making a payment on the debt in question can restart the statute.
Even though it is illegal under the Fair Debt Collection Practices Act, creditors may still try to sue to collect a debt after the statute of limitations has expired. If this is the case, it is important to be present at proceedings to explain to the court that the statute has expired.
If you or a loved one has been struggling with debt and the statute of limitations on the debt does not expire for several years, it may be beneficial to speak with an experienced bankruptcy attorney, who can help you decide if filing for bankruptcy is a good fit for you and guide you through the bankruptcy process.