|You can end up in court after the SOL passes.|
Lawsuits After the Statute of Limitations
When a collection agency sues you, it must send you a summons. The summons notifies you that you're being sued, contains the date, time and location of the hearing and gives you an opportunity to respond and claim a defense. The vast majority of people who are sued by collectors do not respond to their summons. In most cases, this is simply a matter of fear. They either know that the debt is theirs and believe that because the debt is legitimate they cannot fight it or don't know what to do – so they do nothing.
When you don't respond to a summons and claim a defense, the collection agency wins its case by default. Because no one is there to contest their claims, they don't have to prove a thing to the court and the judge awards the collection agency a default judgment.
Don't assume just because the statute of limitations has passed that a collection agency will not sue you. Because so few debtors bother to defend themselves, the collection agency's game of legal roulette has excellent odds. You see, the statute of limitations is an affirmative defense. That means that you can have the case dismissed but only if you bring up your defense in court. If you don't appear in court and defend yourself, the judge has no way of knowing that the statute of limitations on the debt has expired – and the debt collector certainly isn't going to volunteer the information.
Surprise! You Owe a Default Judgment!
|The judge doesn't know the SOL expired unless you appear|
Collection agencies get away with this in different ways. Some don't mail out a summons at all while some intentionally send the summons to an old or incorrect address (the collection agency can view your old addresses on your credit report). Unless you live in a state that requires you to be served with a summons in person, don't be too surprised to check your credit report one day and find a collection judgment.
Filing an Appeal to Remove Judgment
Although state laws regarding judgment appeals differ, you usually have a set amount of time to appeal a judgment. One of the grounds under which you can appeal is improper service. Because you weren't able to defend yourself in the original hearing, the court may schedule a new hearing and make a new ruling.
You don't have the ability to appeal a collection judgment indefinitely. Most states have a time limit for appeals. Let's say, for the sake of argument, the window of opportunity for filing an appeal is six months. If you aren't aware of the judgment, the collection agency may wait seven months before it garnishes your wages or freezes your bank accounts. Once this occurs, you know without a doubt that the collector has a judgment against you. Had the garnishment occurred earlier, you could have appealed, but the collector has waited just long enough to ensure that you no longer have the right to appeal before enforcing its judgment.
Protecting Yourself After the Statute of Limitations Runs
|Got a surprise judgment? Kiss your money goodbye|
And whatever you do, never ever ignore a summons just because the statute of limitations on the debt has expired. You'll regret it dearly when the collector uses a default judgment to drain you financially and destroy your credit.
How to Respond to a Bill Collector's Lawsuit
Can You Reset the Statute of Limitations on a Debt?
Collection Lawsuit Statutes of Limitations By State