Rachel Hunter, J.D.
Article

Tolling and the Statute of Limitations

In the case of Avery v. First Resolution Management Corp., No. 07-35726, 2009 WL 861727 (9th Cir. April 2, 2009) (here is a link to the case: http://caselaw.findlaw.com/us-9th-circuit/1405450.html , the Ninth Circuit Court of Appeals found that a debt was not time-barred and that the law firm representing a junk debt buyer did not violate the FDCPA by filing suit to collect the debt. To understand the case, it is necessary to go into the facts. The debtor in that case lived in Oregon at all times. However, when the debtor applied for the credit card, the agreement provided that it would be governed by New Hampshire law. The debtor ultimately defaulted on the debt and the debt buyer filed suit long after the New Hampshire statute of limitations had expired. However, because the credit card agreement was governed by New Hampshire law, the “tolling” provisions provided that the statute of limitations did not begin to run while the debtor was absent from and residing out of the state at the time the cause of action arose. Therefore, the lawsuit on the debt was timely even though the debt was over 5 years old at the time it was brought.

Again, each state is different and has different tolling provisions. When a debtor receives a letter from a debt collector, don’t ignore the letter. Dispute the debt immediately by sending a certified letter to the debt collector telling the debt collector that the debt may be barred by the statute of limitations. If the debt collector sends a validation indicating a more recent date than the date of last payment, have the validation reviewed by an attorney to ensure that it comports with the law. Get the attorney to advise you on the state statute of limitations and any tolling provisions, if applicable.

Copyright (c) 2012 by Rachel Lea Hunter


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