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The statute of limitations for unpaid debts

On Behalf of | Nov 7, 2019 | Bankruptcy

Connecticut residents who have bills that they are unable to pay often deal with daily phone calls or letters from banks, credit card companies and debt collectors, but state law places strict limits on how long creditors can pursue unpaid debts in court. The statute of limitations for unpaid debts is six years in Connecticut, but consumers who are struggling with unmanageable financial situations are sometimes confused about this timeline and when the clock starts to run.

The six-year statute of limitations for unpaid debts begins to run when the debt goes into default, but it resets when a payment is made. This means that if a Connecticut consumer makes a payment on an unpaid debt five years after it became delinquent, the six years allowed under the statute of limitations would begin all over again. Once the time allowed under the statute of limitations has passed, creditors or bill collectors are no longer able to take legal action against borrowers. However, they may still seek payment.

Most creditors will cease their debt collection efforts once they realize that the borrower knows the debt is no longer legally recoverable due to the statute of limitations. This is why it is important for people in financial difficulties to find out when their accounts went into default. The provisions of the Fair Debt Collection Practices Act require lenders to provide borrowers with details of an outstanding debt in writing when asked to do so.

Attorneys with debt relief experience could explain to consumers who are being harassed by bill collectors how filing for bankruptcy will lead to the issuance of an automatic stay. This is an injunction issued by a bankruptcy judge that orders creditors to end collection efforts. Automatic stays also put a halt to debt-related lawsuits and garnishments.

Source: The Connecticut General Assembly, “Chapter 926 Statute of Limitations”, accessed on Oct. 29, 2019