When Time Runs Out on Old Debts

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Madeleine Jones
April 18, 2017

word cloud with debt in centerWhile old debts can haunt your credit report for years after the debt has been incurred, creditors can’t collect these debts after the statute of limitations has expired. In Nevada, there are various statutes of limitations regarding the most common forms of consumer debt.

Open Accounts – An open account is an account that is open and being utilized by the individual. These include accounts such as credit cards, company sponsored charge accounts, etc. Courts in Las Vegas and Reno have determined that in Nevada this statute of limitation is four years; however, some courts may apply a six-year statute of limitations because these accounts are opened with written contracts.

Written Contracts – Collectors can collect debts on mortgages, loans, services, medical bills, and other debts secured by written contracts for up to six years after the date the contract was signed.

Notes Payable – Notes payable can include either short-term or long-term liabilities that the debtor is responsible for. In Nevada, creditors may pursue these for up to six years after the date the debt was incurred.

Leases – Car leases, property leases, furniture leases, etc. can be pursued for up to four years after the date that the lease originated.

Warranties – Businesses may be pursued for warranty coverage for up to six years after the date the warranty was issued. However, this statute may be reduced by language included and agreed upon within the existing warranty; for instance, a provision that reduces the statute of limitation to two years.

Nevada & Foreign Judgments – Legal settlements may be pursued for up to six years following the date of the judgment.

Child Support – If a court order exists, there is no statute of limitations on the collection of child support arrears. Creditors may pursue these debts until they are paid in full or until the parties reach a settlement agreement.

Beware “Zombie” Debt Collectors

Some debt collectors will attempt to collect old debts, often called “zombie debts” after the statute of limitations has expired. Before paying these debts, it is advisable to speak with a debt lawyer to determine whether the debt collector is within their rights to pursue these dormant debts.

Often, these debt collectors utilize high-pressure tactics that skirt the limits of the Fair Debt Collection Practices Act including making dire warnings about credit damage and legal action. In reality, debt collectors attempting to collect old debts whose statute of limitations has run out on don’t have a leg to stand on.