There is a limit on how long a creditor has to bring legal action against you for unpaid debt. This is known as the statute of limitations. Essentially, if your debt is very old, the creditor may be unable to sue you to collect.
If you do not pay your debt for a long time, eventually your creditor may file a lawsuit against you for nonpayment of debt. If your creditor is successful in court, they get a judgment against you. With a judgment, your creditor has the right to powerful collection actions, including the ability to garnish your wages or levy (take money from) your bank account.
However, your creditor has a limited time in which they must bring a lawsuit. Typically a lawsuit for nonpayment of debt is a breach of contract case. Think of it this way: if you signed a contract agreeing to pay back the debt, and you don’t pay the debt back, then you have breached the contract.
Georgia Statute of Limitations on Debt Collection
In Georgia, the statute of limitations on written contracts is 6 years from when it becomes due and payable. O.C.G.A. §9-3-24. This means that after 6 years passed, no action can be brought in court. The period begins tolling from the date of the last payment.
In a 2008 case, the Georgia Court of Appeals held that contracts for credit cards are considered written contracts in Georgia and fall under the purview of GA Code §9-3-24 six year statute of limitations. Hill v. American Express, 289 Ga. App. 576 (2008). In Hill, even though the debtor, Ricky Hill, did not sign a contract with American Express, the Court found that “the contract was agreed to, not by my signature, but by use of the card[.]” Id.
Open Account, Implied Promise, or Undertaking
In Georgia, the statute of limitations on an open account is 4 years. “All actions upon an open account, or for the breach of any contract not under the hand of the party sought to be charged, or upon any implied promise or undertaking shall be brought within four years after the right of action accrues.” O.C.G.A. §9-3-25. Under this code section, the period begins from the date of the default, not the date of the last payment.
Before Paying Off An Old Debt, Check the Statute of Limitations
Once the statute of limitations has passed, creditors may still try to collect from you but they have no legal way to compel you to pay. Prior to entering into an agreement to pay a debt, we encourage you to make sure the debt is still due and check to see if the statute of limitations has run.
Stop Debt Collection & Erase Debts by Filing Bankruptcy
Here at the Law Office of Barbara B. Braziel we will make sure you understand the benefits of bankruptcy and how filing with affect you and your family. We take the time to explain the bankruptcy process to our clients. We invite you to learn more about our firm here and come meet with us for a free no-obligation consultation.
For over 35-years we have proudly served the people in Savannah, Richmond Hill, Hinesville, Pooler, Port Wentworth, Tybee Island, Clyo, Ellabel, Midway, Springfield, Pembroke, Brooklet, Garden City, and Ludowici, Georgia.
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