Statutes differ for time-barred debt

The issue of a statute of limitations recently came to the forefront after consumer debt buyer Asset Acceptance (AA) agreed to a $2.5 million settlement with the Federal Trade Commission, the Stockton Record reports. It was alleged that AA utilized deceptive practices to collect. One example occurred in 2010, when Cincinnati, Ohio, resident Tim Bond was contacted by AA and told that he was in debt for more than $7,000 for a credit card he opened in 1996. While finding debtors may be a specialty of AA, if the statute of limitations on a debt has exceeded a certain number of years, no legal action can be taken against the debtor. This means the debt is time-barred, which protects the person being contacted from getting sued. However, the statute tends to differ from state to state. "There can be 50 different (state) laws involved, and different judges can view the law differently," said AA general counsel Edwin "Skip" Herbert, as quoted by the news source. Contact rules differ state-to-state for time-barred debt as well, InsideARM reports. For example, in Mississippi and Wisconsin, it's illegal for any collection efforts to be taken on these accounts. In New York, collectors are required to provide specific information about consumers' rights in every communication.