Expert: Jason Shear, Esq. - 6/17/2009

Question
QUESTION: Jason,

I am being sued by a collection agency over a CC debt that is over 7 years old from the last time I made any payment on the card.  The debt was with First Premier Bank who charged off the account.  In 2005 a collection agency purchased the debt and is in the one sueing.  I am just trying to find out when SOL go into effect and whom has to prove it.  Thank you for your help.

ANSWER: Drew:

Good question.  Typically, the limitations period will begin from the date of default.  This approach is consistent with the rule that, for a breach of contract action, the statute of limitations runs from the time of the breach, although no damage occurs until later.  In addition, the collection agency/debt buyer has to prove that the claim was brought within the SOL.  If you are sure seven years has past since the last payment, you are past the SOL for most states.  Remember to raise the SOL defense in your Answer.

Also, making the collection agency prove that they own the rights to your alleged account is also a strong defense in these types of cases.  Hope this answers your question.  If you have any follow up questions, please do not hesitate to ask.

Jason Shear
Attorney at Law
Admitted in NY & NJ
(716) 566-8988




---------- FOLLOW-UP ----------

QUESTION: Do I have to raise the issue of the SOL in written form or when I am appearing in front of the judge?  The collection agency says that since they bought the loan in 2005 that it is from that date that the SOL is in effect, I disagree.

Answer
Drew:

To answer your first question, yes, raise the SOL defense in your written Answer and if there is ever a Court hearing on this matter.

With regards to what the collection agency says regarding the SOL, some debt buyers go so far as to claim that the limitations period begins to run when they purchase the debt.  This assertion is clearly wrong, because the date of default generally triggers the limitations period, not the date the collector discovers the default.  And even if a limitations period begins to run when the creditor discovers the default, this rule applies to the original creditor's discovery, not a later debt buyer.

What this collection agency is arguing is ridiculous.  Subsequent purchasers of the debt do not start the period running anew.  In that case the statute of limitations period would go on forever.
Hope this was helpful.  If you have any other question do not hesitate to call.

Jason Shear, Esq.
Attorney at Law
Admitted in NY & NJ
(716) 566-8988



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