Debt and the statute of limitations

A statute of limitations is a law that places a time limit on pursing a legal remedy. This means that once a certain amount of time has passed, the law prohibits attempts to sue over an alleged wrong doing.

Knowing about these limitations may be crucial in determining how to address financial problems. In Missouri, most financial contracts allow for collection for 10 years, while Kansas allows 5 years. There are some exceptions to this, specifically for oral contracts. What is important to remember, is that the statute of limitations begins running when there is a breach; often, non-payment. The time limit does not begin with the purchase or the creation of the contract, but when the first payment is missed.

It is also important to note that the statute of limitations is reset any time a payment is made towards that debt. So, if 3 years have passed since the last payment towards a credit card, and then a new payment is voluntarily made, the statute of limitations starts over. This is important matter especially when it comes to trying to settle old debts.

Another important note is that the statute of limitations doesn’t apply once a judgment has been obtained. There are different rules that apply to judgments, including the ability to revive a judgment after 10 years. Knowing how these time limits affect you and your debt are essential to help make informed, financial decisions.

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