How Does the Statute of Limitations Affect an Outstanding Debt?

If somebody or some organisation owes you a significant amount of money and will not pay up, you'll want to explore all your options. You may have taken steps to try and recover the debt, and these have fallen on deaf ears, and the process has now been going on for some considerable time. Do you need to worry about time limits and what is known, in legal terms, as the 'statute of limitations?'

Understanding the Law

As always seems to be the case, the law can be somewhat complicated in this area and will certainly vary from jurisdiction to jurisdiction. In many cases, you may have up to six years to pursue debt and, specifically, to file the necessary paperwork with a court.

The situation can change if you get a court judgement in your favour, and this will extend the statute of limitations to as many as 12 years. You will definitely want to take action as soon as possible, however, if you are approaching any of those time limits. At the least, you should file paperwork as this should allow you to continue your debt collection process after the notional expiry date.

Extending the Time

You may be able to employ some strategies to buy yourself more time. If, for example, you are able to connect with the debtor and they were to write back to you in relation to the outstanding sum, then you could use that as a written acknowledgement of the debt. In many jurisdictions, this would reset the clock, and you would then have a lot of extra time to take legal action if you needed to.

Getting Nowhere

Many people in your situation will simply go back and forth with the other party and will not bring in an expert to help. The debtor may feel somewhat comfortable in their position and may think that you will not take any further action to pursue the money. They may simply watch your communications come and go and not make any efforts to pay off the sum in question. So if you find yourself in this situation, you should bring in a debt collection agency.

The Better Approach

These agencies know how to address a stubborn debtor and will be much more consistent at chasing the money than you would ever be. They have a great deal of experience in this area and can bring some extra pressure to bear, to sort everything out. While they will inevitably charge a fee for their work, of course, look for agencies that operate on a low commission basis. You'll find that this is well worth the effort, and you may recover the outstanding money without having to take the matter to court, or worrying about that statute of limitations.

For more information, contact a low commission debt collection service today.