Essentially, yes, actions you take can reset the statute of limitations and open you up to a lawsuit once again. Keep in mind, however, if the collection agency files a lawsuit against you and you attempt to use the statute of limitations defense in court, the company will then have to prove that you did, in fact, reset the statute (more on that in a minute).
You Can Reset the Statute of Limitations on Debt By Making Payments
A debt's statute of limitations is essentially the time-clock on a dormant debt. As long as that debt remains dormant, the clock continues to tick. Should you make a payment on the debt, this "reactivates" the account. Because the debt is no longer dormant but is now active, the statute of limitations ceases to matter. If and when you once again default on your payments, your state's statute begins anew.
|Don't reset the clock!|
Now, before I go any further, I will say that supposedly in some states a debtor can unintentionally reset the statute of limitations by promising to make a payment, even if he doesn't ever actually submit one. This is iffy at best. Even in a case where the state's laws allowed such a thing, the collection agency would have to provide proof that the debtor made such a promise. Granted, collection agencies record telephone calls, but the idea that they would maintain those telephone records for long enough to use them as lawsuit fodder is also a relatively sketchy concept.
Earlier today, I stumbled upon a post that absolutely disgusted me. A self-proclaimed "credit guru" who seems to be plastered everywhere I look online these days was telling some poor girl that by merely talking to a debt collector about a ten year old debt, she had already reset the statute of limitations. This, of course, is complete and utter BS.
Frustrating. In reality, it isn't that hard to look up the specific statutes for your states. Most states provide individuals access to the law codes online.
Resetting the Time Frame on an Old Debt
If you have a debt that is owned by a collection agency yet is time-barred, send the collection agency a Cease and Desist letter and forget about it. Pull your free credit report three times a year (one every four months. It's still free as long as you don't pull the same bureau's report twice in a year) to make sure the collection agency hasn't gotten sneaky and pursued a default judgment on the sly and then leave well enough alone. You can't reset the statute of limitations if you don't take initiative to do so.
Be warned, however, debt collectors will pull every trick in their arsenal to try and trick you into paying anything you possibly can so that you'll once again be open for a lawsuit. Don't fall for it.