There are two defenses in debt law cases that you should consider if you are being sued: statutes of limitationsand what is called “cowards.” Both are based on the passage of time, and both have rather vague status in law. This article looks at what they are and how to use them.
statutes of limitations
The statute of limitations (in civil law) is the amount of time allowed before the plaintiff files a lawsuit. That is, if a certain amount of time passes after the claim is “ripe” for litigation before filing a lawsuit, the action will be lost. Sounds simple, perhaps, but it’s not.
What is the debt statute of limitations?
Unfortunately, it is not easy to say what the statute of limitations is for debt in general. This is for two reasons. First, different jurisdictions treat common forms of debt (credit card debt, for example) differently. Sometimes it is treated as “revolving credit” and sometimes as “credit on a written contract.” In Missouri, at least, the difference is substantial, with the “contract” version having a much longer period of limitations. And then on top of that, different states have different statutes whatever name they give to the underlying obligation. You can find more information on the subject on my website.
ripe for suit
A claim is ripe for trial after it is “complete.” In the case of debt law, this generally means default—that is, when you don’t pay when the bill is supposed to be due, not when you incur the debt. So if a student has a loan, for example, that didn’t come due until they finished school for a year, that year doesn’t count toward the statute of limitations. And credit card payments aren’t delinquent until you pay. If you make a payment after that, it could take you out of default and reset the limitation state. That’s one of the reasons debt collectors like to take any kind of payment they can from you.
There are other ways to “touch” (like pausing a video) the statute of limitations, but that’s a topic for another day.
What do you do if the time limit has passed?
The statute of limitations as a defense
This is where the state of limitations gets a bit vague. It is certainly an “affirmative defense”, which means you must affirm and prove it. On the other hand, if the date of default is included in the lawsuit (and the date is outside the statute of limitations), you could file a motion to dismiss the claim. And this is because they have admitted the fact by including it in their petition. Some people file motions to dismiss even if the dates have not been set in the petition, and sometimes the courts will hear them on that basis, although they probably should be heard as motions for summary judgment, which involve somewhat different rules and timelines. .
Statute of limitations as jurisdictional bar
Some courts have viewed the statute of limitations as a jurisdictional bar. That is, taking the lawsuit beyond the appropriate time prevents the court from hearing it (and the defendants cannot waive the defense). Some courts in jurisdiction may still follow that rule, but it’s a good idea not to count on it. State the defense at the outset if you know it, and if you discover on discovery that the time limit has passed, you should try to amend your answer to include the defense there. It is probably possible to give up the defense if it is not asserted in time.
Statute of limitations as a counterclaim
Courts have ruled that suing debt collectors to collect a debt beyond the statute of limitations is a violation of the Fair Debt Collection Practices Act. It is an “unfair” debt collection practice because the courts recognize that most collection claims, valid or invalid, go unanswered. Therefore, if you discover that a claim has been filed against you beyond the statute of limitations, you should consider a counterclaim on this basis.
cowards
Laches, like statutes of limitations, are basically based on time. However, they are vague. The question is whether so much time has passed, even if the statute of limitations has not passed, that it would be unfair to allow the plaintiff to sue. The court has to believe that the plaintiff waited an unreasonably long time and that something happened to the defendant that reduced his ability to defend the case.
Because there is a statute of limitations for every action, one might think that it was never unreasonable to file a lawsuit before the statute of limitations has expired. And I am not aware of any debt case where laches has been argued and used as a defense. Like the statute of limitations, it would be an affirmative defense that the defendant would have to plead and prove. I suspect that laches could become a problem in foreclosure cases because these cases involve very questionable behavior on the part of the lenders and because the lenders have been very careless with supporting documentation.
Although I am not aware of laches being treated as a basis for a counterclaim, it could certainly be argued that collecting a debt after so much time has passed that the defendant’s ability to defend itself has been impaired would be an unfair collection practice. In fact, considering the way debt is bought and sold these days, it might well raise a laches defense for most people: the underlying documents are frequently lost or destroyed, and this, at least in theory. , makes the defense of the case more difficult. Therefore, it makes sense to raise the defense if the debt is old.
