What is the statute of limitations on debt?
Full Question:
I want to know the statue of limitations on a ten year old debt. The bank that it was owed to went out of business. Another company 10 years later is trying to collect debt. Is that legal?
01/31/2007 |
Category: Debts and Credit |
State: Oregon |
#1214
Answer:
When banks “go out of business,” they, or the FDIC, sells the debts owed to
the bank, usually to another bank.
The Statute of Limitations on debt depends on the type of debt and your
State's civil debt collection codes. Generally, unsecured debt expires 3 to 6
years after the last missed payment or the consumer's last activity on the
account. Written contracts such as car loans generally expire after 6 years.
When the Statute of Limitations expires, it can be used as a defense to bar
collectors from collecting through the courts, however the debt DOES NOT
go away! Collectors can still attempt to collect the debt using other legal
dunning methods.
