How Collection Agency Tolling Works
Tolling protects collection agencies from losing their rights to sue a debtor simply because the debtor is unavailable. Lets look at the following example:
Bobby owes $2000 to Collection Agency X. The statute of limitations for open accounts in his state is four years. It's been two years since Bobby defaulted on his payments. Bobby is deathly afraid of being sued by Collection Agency X. Bobby knows that it will be nearly impossible (and almost certainly too much trouble) for Collection Agency X to sue him if he is in another country. Because he has family in Russia, Bobby decides to wait out the remaining two years on his debt's statute of limitations there rather than at home, where he feels like a sitting duck.
Bobby's situation can have one of three potential outcomes after he returns home:
1. Collection Agency X never sues Bobby.
2. Collection Agency X sues Bobby. Bobby responds to the court summons using an expired statute of limitations as his defense. Because Collection Agency X was not aware that Bobby ever left the country, it is forced to drop its lawsuit.
3. Collection Agency X is aware that Bobby left the country for a period of two years. It files suit against Bobby. Bobby responds by claiming an expired statute of limitations as his defense. Collection Agency X does not drop its lawsuit. Instead, it submits documentation to the court demonstrating that Bobby left the country for two years. Because collection accounts are "tolled" when an individual leaves the U.S., there are still two years left on the debt's statute of limitations.
|You can't always run and hide from collectors.|
You could argue that leaving the country to escape debt collectors isn't technically "cheating" since the collection agency could go through the time and effort of pursuing the debt internationally if it really wanted to, but the collection agency would argue that the same rules should apply to everyone and debtors shouldn't be rewarded for running away from their debts. Thus, the company tolls your debt.
Not All Accounts Get "Tolled" When the Debtor Leaves the Country
Now, let me say straight up that I am not giving anyone instructions on how to hide from their creditors. That being said, a creditor can only use tolling as a defense to an out-of-statute lawsuit if the creditor knows that you left the country.
One of the primary ways creditors find out that you are living abroad is by your forwarding address. Keep in mind that these companies want to track you down, and if you've given your friends, family, current creditors and the post office your new international address, its a fair bet that the collection agency will have it before long. Remember, debt collectors can call your family members in an effort to locate you. Although collection agents aren't supposed to lie to your loved ones, it happens all the time and your brother/sister/cousin might be more than happy to give your long-lost "friend" your new contact information.
|Your debt may still be there when you return.|
Running Away From Debt
Lots of consumers who are really and truly desperate opt for a new life abroad rather than staying in America and facing their creditors. Keep in mind, however, that because of a collection agency's right to toll your debt, even leaving the country isn't a guarantee that one day you'll be able to return home to a peaceful, debt-free existence. Thus, you should think long and hard before packing your bags and catching the next plane to Timbuktu. Your debts may not follow you, but a tolled debt never truly dies.
How Debt Collectors Find You
Lawsuit Statute of Limitations
How to Respond to a Bill Collector's Lawsuit