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Even if a debt is past the statute of limitations, you may still receive collection calls. Here’s what you can do…

3 minute read

Question: The university in Mississippi that I attended recently sent a notice to me for a balance due. The university said they did an internal audit and found that I owed money. This is not money from student loans. I received student loans when I was enrolled in 2003. The university claims that during the audit, there were some date discrepancies on when I withdrew, therefore they had to return some funds to the student loan originator. I was last enrolled in school in 2003. I don’t know when the audit was conducted. The notice I received (April 2019) said that if the balance was not paid in 30 days, it would be sent to collections. I’ve done a little research of my own. What I have found says that the statute of limitations is not more than 6 years. Would this be from that date of the debt or the date of the audit?  Does this apply to my situation and what can I do?

Crystal B. in Minneapolis

Steve Rhode, the Get Out of Debt Guy, responds…

Dear Crystal,

The claimed debt could very well be outside the statute of limitations. But people misunderstand how that works. If a debt is outside the statute of limitations that does not mean they can’t attempt to collect on it. The out of statute argument is something you can raise if you are sued over the debt. But there is nothing automatic that would allow the expired debt to not be attempted for collection.

However, there is some talk recently about preventing creditors from either preventing them from collecting on out of statute debt and/or requiring creditors to inform the consumer the debt is outside the limits of being able to sue over the debt. There is no standard on this at this time.

I think your gut reaction is correct in that this is an out of statute debt. The statute of limitations on most debts in most states expires after six years. However, that is a legal position and the only person who can give you a specific legal opinion is an attorney who is licensed to practice law in your state.

One place to look for such an attorney is at ConsumerAdvocates.org.

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At this point, you should not panic. What you need are facts and legal advice so you can make an educated decision on how to proceed.

I’d really like to know more about this debt that is allegedly owed since 2003. Does the school even have any documentation to support the claim? You can attempt to get them to validate the debt. If the debt is large and is not student loan related, then it can be eliminated with bankruptcy but I don’t have enough information to give you strong guidance on that option.

I would not admit that you owe the debt. Doing that can restart the statute of limitations clock.

The most logical first step would be to make an appointment with a consumer attorney in your state to have them review the situation and give you advice if you have a defense if sued over the debt. If the attorney tells you the debt is outside the statute of limitations then you can politely tell the creditor what your attorney said and that they should not pursue the matter further.

If they do attempt to collect, direct them to your attorney who will love to deal with them for an affordable fee. Alternatively, you can draft a cease and desist letter to tell the collector that you no longer wish to be contacted. If a debt is past the statute of limitations so they can’t sue you in court, then this letter should stop any further contact.

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About the Author

Steve Rhode

Steve Rhode

Steve Rhode is known as the ‘Get Out of Debt Guy’ and he has been teaching people how to deal with money problems since the 1990’s. After his own personal bankruptcy, he formed a nonprofit organization to help people get out of debt. Since then, he’s had a syndicated advice column in 50 newspapers across the country and has written three books. He’s appeared on FOX, CNN, ABC, NBC, and MSNBC giving money advice and now he is now an investigative reporter specializing in covering consumer debt and the debt relief world.

Published by Debt.com, LLC