Hi all. I have seen it stated all over the net, including on this board, that making a payment can only restart the clock on your state's SOL for lawsuits if such payment is made: 1. Before chargeoff, and 2. To the original creditor. The theory is that for a new cause of action to accrue, the account has to be brought current and then default again. So, a payment to a JDB supposedly cannot restart the SOL clock. However: I have found nothing in the relevant statute or case law of my state (MN) that even remotely supports this. Everything says very simply and plainly that new written acknowledgment restarts the SOL period, and that any payment of principal or interest counts as written acknowledgement. Nowhere, at all, is a distinction ever drawn between the OC and a CA or JDB, or between pre- and post-chargeoff. Nowhere, for that matter, is it mentioned that a new and separate cause of action must accrue to restart the clock. I cannot find any actual evidence for this theory cited by anyone; only assertions and opinions. When I've asked for the basis for this assertion on other boards, I've only had the assertion repeated to me with the above reasoning; but that reasoning does not address the seemingly-contradictory plain reading of the statute. Can someone who believes this to be the case, that payments to a JDB cannot restart the SOL period, please point me in the direction of the specific legal reasoning?
SOL refers to Statute of Limitations, which, depending on state law, places a limit on how long someone has to sue in court. What events reset SOL depends on each state's laws. The 7 year reporting period for reporting negative information on credit reports is defined in FCRA. It is measured from the first date of delinquency, even if payments are later made. Reporting of negative information tied to one delinquency, and the period of negative reporting of lates, for example, until the account is brought current, is not reset by payments. A new 7 year period could start if the first delinquency were brought current, and then a new delinquency occurred.
Right. As noted, I'm talking about the real SOL. The SOL for filing suit to recover the debt. I'm thinking that people who make an argument about the SOL (*not* the reporting period) being immutably tied to that first delinquency are either engaged in wishful thinking, or are conflating the SOL with the rules for the reporting period. Many states say plainly that a payment restarts the SOL, with no qualifications or exceptions. But, if there's something I'm unaware of, say perhaps an aspect of the same common law that the SOL is rooted in, which is considered applicable even though not stated in the statutes, I'm all ears. If anyone can actually make a case for the theory that payments to a CA/JDB cannot ever ever (click that) restart the SOL, I'd love to hear it as it'd be helpful. I just don't want to start throwing around things like SOL letters that may not be legally accurate. That's a good way to get yourself in a hole.
Although the concept of a limitation on enforcing collection of a debt is probably rooted in common law, the details depend on statute, on a state by state basis. Here is an interesting overview: http://en.wikipedia.org/wiki/Statute_of_limitations There may also be differences if the statute has already run, and a payment is made later. That may, or may not, reset the SOL, depending on state. Some states apparently have a "statute of repose", where the debt is null and void, and where even voluntary collection cannot be legally attempted. There was some discussion of this concept on AoC, before it crashed. The problem, of course, is the large volume of out of statute consumer debt traded in the junk debt market, with possible continued collection decades after it went delinquent. The original creditor may be out of business, or bought out, even several times, docs may not be available, findable, or the purchase agreement may not allow access to docs. The debt may have been paid to the original creditor, or paid to a later purchaser, but sold off in error, and even the consumer's records of payment may not be available or practical to track down due to limitations on how long banks store their records, or bank mergers. Determining the legitimacy of such debt may cost beyond the value of the claim. Yet some JDBs still build their business on collection of such old debt, cheaply purchased, collecting on debt they have no intent to ever "validate". The result is what you would expect: bullying and other FDCPA violations against consumers without regard to whether any legitimate debt was owed. http://articles.moneycentral.msn.com/SavingandDebt/ManageDebt/SleazyNewDebtCollectorTactics.aspx Before CAMCO was shut down, FTC claimed 80% of what they collected was not owed due to previous payment or settlement, erased by bankruptcy, or they were attempting to collect from the wrong party. That is not a legitimate business.
SOL for PA I found this online (another member's link) for PA... it says that "SOL starts from first delinquency" PENNSYLVANIA Subchapter B. Civil Actions and Proceedings. § 5525. Four year limitation. The following actions and proceedings must be commenced within four years: An action upon a contract, under seal or otherwise, for the sale, construction or furnishing of tangible personal property or fixtures. Any action subject to 13 Pa.C.S. § 2725 (relating to statute of limitations in contracts for sale). An action upon an express contract not founded upon an instrument in writing. An action upon a contract implied in law, except an action subject to another limitation specified in this subchapter. An action upon a judgment or decree of any court of the United States or of any state. An action upon a contract, obligation or liability founded upon a writing not specified in paragraph (7), under seal or otherwise, except an action subject to another limitation specified in this subchapter. SOL STARTS FROM FIRST DELINQUENCY Section 2725 of the Pennsylvania Uniform Commercial Code provides that "an action for breach of any contract for sale must be commenced within four years after the cause of action has accrued." 13 Pa. Cons. Stat. Ann. 2725(a). A cause of action for breach of a contract for the sale of goods "accrues when the breach occurs." 13 Pa. Cons. Stat. Ann. 2725(b). In the case of an installment contract, breach of the whole contract occurs "whenever nonconformity or default with respect to one or more installments substantially impairs the value of the whole contract." 13 Pa. Cons. Stat. Ann. 2612(c).
The Sol will start when the breach occurs, but what you have to look for are any tolling statutes. In some states a payment or simple promise to pay will reset the SOL, some states require the promise be in writing. As Ontrack said, it is a state by state thing.
sol In a cause of action state isn't the actual date of the breach (late pay, over the limit etc.) start the sol run? And if the account is never again completely current (always over the limit) even though payments are still being made the original breach date does not change if the payments made can never bring the account to a current status. This first breach which is not cured by the payments should be the start of the run. Any thoughts?
