Does America Have a Statute of Limitations on Debt Collection?

For many people in debt who cannot find any solution to the issue, ignoring the problem seems like the best option. While that strategy might allow a person to avoid the issue for a short time, it certainly does not solve the problem for good and can often only serve to make the matter worse.

The Perspective of a Business Owner

For a business that is owed money, people who hold such delinquent accounts can pose a significant problem. Rather than contributing to resolving the issue in a way that suits both parties, this strategy can hurt a business owner badly.

Losing income due to overdue invoices amounting to debts from clients that avoid paying you doesn’t only hurt a business owner financially; it can also cause a great deal of mental and emotional anguish. When a business is suffering that you own or manage, you will only blame yourself for those losses.

Problem-solving an issue as complex as unpaid debt is also distracting, resulting in poor performance at your regular job. In such cases, the stress of the situation may be exacerbated by the question of whether the statute of limitations might run out. As such, the first step in alleviating your worries will be to learn what the collection agency laws say about the matter.

The Viewpoint of Delinquents

Given the low chance of any positive outcome occurring when a debtor actively avoids debts for services they have enjoyed, it might seem irrational that anyone would expect the statute of limitations to help. If this is your attitude about the matter, you would likely be surprised to hear how often delinquents, in fact, do avoid paying their bills.

Rather than attempt to guess what might be on the mind of the individual that owes you money, you should focus on collecting commercial debt by working with professionals who understand what it takes to resolve the matter quickly. 

What are the Laws?

If you’re a business owner who is suffering from lost income, it won’t please you to hear that there are situations where a statute of limitations regarding unpaid debts comes into play. That said, not every situation is created equal. To gain a better perspective on whether the debts owed to your company might disappear, it will help to have your questions about debt collection answered by our experts.

What Does a Statue of Limitations Apply?

One of the difficulties for business owners when it comes to understanding the laws regarding the rights of delinquents who owe money to companies and the statute of limitations for any particular type of debt is that changes in debt collection laws occur frequently.

According to the Fair Debt Collection Practices Act (FDCPA) that came into effect on November 30, 2021, the majority of statutes of limitations fall within three to six years. That said, there are three things that can impact a particular situation:

• Laws that Vary Per State
• The Type of Debt in Question
• Whether the Debt Agreement or Contract Makes Particular Stipulations Regarding a Statute of Limitations

Given that your particular situation may dictate specific rules about whether or not money that a customer owes to you has a statute of limitations or when that statute of limitation might be, you should ensure that you start a lawsuit before the possibility of a limitation comes into play.

Other Circumstances

In regards to a statute of limitations, there are additional factors that can come into play. For example, if the statute of limitations has expired, but the delinquent has been summoned to court and does not make an appearance to argue their case, a judge may not accept the statute of limitations as the end of the matter. For these reasons, it is always worthwhile to partner with a collection agency to find out what strategies might be available to pursue. 

How We Can Help

If you’re reading this because you believe it might already be too late, the good news is that you’ve already made the first step toward bringing income back to your business. Whether you’re facing a situation where you need help with tuition debt collection, medical debt collection or commercial debt collection, the best step you can take is to partner with our team.

Strategies We Offer

Today’s collection agencies are debt resolution specialists; this means we employ strategic debt collection techniques that aim to take the rights of all parties into account. When you work with an ethical debt resolution team, you won’t have to worry about acquiring a bad reputation for working with an agency that employs unethical tactics.

Ethics, Dignity and Respect

At Summit A•R, we uphold a P.H.D. Philosophy in regards to ethical strategies in all of our debt resolution practices. This P.H.D. stands for Preserving Human Dignity and refers specifically to the way that we approach delinquent accounts. That’s because our team communicates with every person we encounter with dignity and respect. 

Not only do ethical practices ensure that our company abides strictly by debt collection laws, but they also improve our record for success. After all, most delinquents who face a debt problem would rather resolve the issue than ignore it. When you can demonstrate to someone that you intend to help them work through the situation and are not interested in threatening or harassing them, people tend to become much more cooperative.

In the world of debt resolution, time is a factor. Not only is it critical that your lost income be returned to your company as quickly as possible, but you also need to ensure that you do not allow the situation to cross beyond the statute of limitations. For this reason, you should always contact your debt resolution team as soon as you encounter a situation where a customer or client avoids paying you the debts they owe.

There’s no time to waste, so call us today to get started on resolving your issue.