Colorado, like other states, has laws in place to limit the time creditors have to pursue legal action to collect on debt. Understanding the statute of limitations on debt in Colorado is crucial for both creditors and debtors. This guide will clarify the relevant laws and answer common questions.
What is the Statute of Limitations?
The statute of limitations is a legal time limit within which a creditor can file a lawsuit to collect a debt. Once this time period expires, the debt is not automatically erased, but the creditor loses the legal right to sue you to collect it. This doesn't mean the debt disappears; it simply means the creditor can no longer use the court system to recover the money. Keep in mind that this only applies to legal action; other collection methods might still be employed.
Colorado's Statute of Limitations for Debt:
In Colorado, the statute of limitations for most debts is six years. This six-year period begins to run from the date the debt becomes due. For example, if you have a credit card bill with a due date of January 15th, 2017, the six-year clock starts ticking on January 15th, 2017. After six years from that date, the creditor can no longer sue you to recover the debt.
Important Considerations:
- Types of Debt: The six-year timeframe applies to most debts, including credit card debt, medical bills, and personal loans. However, some debts might have different statutes of limitations. It's always best to consult with a legal professional for specific circumstances.
- Written Acknowledgement: If you make a written acknowledgment of the debt (e.g., signing a payment agreement, making a partial payment, or writing a letter acknowledging the debt) after the six-year period has begun, the statute of limitations resets, and the creditor has another six years to pursue legal action.
- Partial Payments: While partial payments can restart the statute of limitations, simply acknowledging the debt without making a payment may not. Legal advice should be sought for clarification on this point.
- Judgment: If a creditor has already obtained a judgment against you, the statute of limitations on collecting that judgment is much longer – often 20 years.
Frequently Asked Questions (PAAs)
Here are some common questions about the statute of limitations on debt in Colorado, addressed based on general legal principles. Remember, these are for informational purposes only and not legal advice. Always seek professional counsel for your specific situation.
How do I know when the statute of limitations starts on a debt?
The statute of limitations clock begins the day the debt becomes due. This is typically the date specified on the contract or invoice.
Does the statute of limitations apply to all types of debt in Colorado?
While six years is the common timeframe, some types of debt, such as judgments or certain specialized contracts, may have different statutes of limitations. Legal expertise is recommended for specific debt types.
What happens if the statute of limitations expires?
The debt isn't erased, but the creditor loses the legal right to sue you for it. However, they may still try other methods of collection.
Can a creditor still contact me after the statute of limitations has passed?
Yes. Even though they can't sue, they may still attempt to contact you to try to collect the debt. You are not legally obligated to respond or pay.
What should I do if a creditor contacts me about an old debt?
Review the date the debt became due. If the statute of limitations has expired (six years from the due date), you can inform them of this fact, but you are under no legal obligation to pay. However, you should keep records of all communication.
Can I get my credit report corrected after the statute of limitations expires?
The statute of limitations expiring doesn't automatically remove the debt from your credit report. You'll need to contact the credit bureaus directly and potentially dispute the debt.
Should I seek legal advice?
If you are facing debt collection issues, especially concerning the statute of limitations, consulting with a qualified Colorado attorney is highly recommended. They can provide accurate information specific to your circumstances and advise you on the best course of action.
Disclaimer: This information is for educational purposes only and should not be considered legal advice. The laws surrounding debt collection and statutes of limitations are complex, and it's essential to consult with a legal professional for guidance on your specific situation.
