Generally speaking, a debt is only gone when the debtor pays it. Still, California does have a four-year window in which the creditor can take legal action to enforce a valid written contract. However, the clock on the four-year limit can restart each time a debtor makes a partial payment – a partial payment or acknowledging the debt after the four-year limit can also restart the clock. Moreover, the four-year statute of limitations does not prevent the creditors from using other legal tools to collect.
Different debts have different windows
While student loans have no expiration date, other debts will be of varying lengths. Details weighed include:
- Type of debt
- The state law cited in the credit agreement
- The state where the debtor resides (different states have different regulations)
Regarding The Fair Debt Collection Practices Act
Those attempting to collect a debt need to consider the above detail to ensure that their claim is valid and that it does not violate the current Fair Debt Collection Practices Act (FDCPA), which is the regulation that prevents lawsuits over expired consumer debt obligations. The creditor or collector cannot sue or threaten to sue the debtor but can send notices and take other actions.
Debtors are responsible for defending themselves
If the creditor files a lawsuit after the time limit, the debtor must still show up in court and cite the statute of limitations and prove they have done nothing to reactivate the obligation. Moreover, failure to appear in court and raise the statute of limitation as a defense can prompt judges to award a judgment against the debtor.