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What To Know About The Statute of Limitations

I often get calls from people regarding judgements being entered, assets such as bank accounts or vehicles being seized, and even wages being garnished on debts that they believed were past the statute of limitations (five years in Florida on a debt based upon a written instrument) when the collection activity took place. The statute of limitations (SOL) is one of the most misunderstood areas of the law. Unfortunately, one small misstep and your right to what should be an absolute defense to an old debt can slip away like sand through your fingers. Florida Statutes, section 95.11(b), states,

A legal or equitable action on a contract, obligation, or liability founded on a written instrument, except for an action to enforce a claim against a payment bond... shall be commenced within 5 years.

Most people believe that if they haven’t incurred any new debt on an account in five years, that the statute has run and collection activity is barred by law. The problem in most cases arises from debtor behavior that unwittingly extends and restarts the time period. The key is that the five years runs from the last “activity” on the account. That “activity” can include use of the credit (ie, charging on a card or using courtesy checks or balance transfer options), payment on the account, agreeing to make a payment or even agreeing that the debt is yours and is accurate. No matter how small, any payment on the account will restart the five years. Likewise, even a one dollar charge on an account will restart the statute.

The second area of confusion, and in many cases, lost rights, is that a statute of limitation is not automatic. In other words, if a defendant in a lawsuit does not properly raise the defense of the debt being barred by a SOL, the defense is deemed waived and a judgement may be entered without regard to the age of the debt. Contrary to popular belief, creditors do often try to collect and even file lawsuits on debts that are older than the SOL.

If you are being harassed or sued on a debt and you believe that collection of the debt may be barred by a statute of limitations, seek the advice of an experienced debt defense/bankruptcy attorney right away. The proper legal maneuvering is critical to maintaining this important defense and, in many cases, winning your case.

Just to be sure that there is no confusion, be aware that regardless of the entry of a judgment (before or after a statute of limitations period), most debts can still be included in a bankruptcy case and discharged or adjusted down.

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Robert J. Warren, P.A., Attorney at Law - Gainesville Bankruptcy Attorney
Located at 703 N. Main St., Suite C, Gainesville, FL 32601.
Phone: (352) 377-6600.
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