Creditors must file a lawsuit within the time limits specified by the State of California. The time limit given to a creditor to file suit depends upon the type suit being filed.
Like most attorneys, I have counseled many people who called complaining about abusive debt collectors who are trying to collect on an old debt. Many debt collection agencies employ agents that employ abusive, threatening and intimidating tactics in an effort to scare someone into paying or making payments on an alleged debt. Many collection agencies know that the debt is beyond the statute of limitations. Many consumers, however, are unaware of their rights and fall victim to many predatory collection practices.
The statute of limitations dictates the maximum time limit within which a law suit can be filed. As time goes by witnesses memories fade and the documentation necessary to support a lawsuit may become unavailable or difficult to obtain. Additionally, courts do not want do become bogged down adjudicating old matters that have little, if any chance resolution. In California, the statute of limitations on collection actions is set forth in the California Rules of Civil Procedure. The length of time that a creditor has to file suit depends the type of debt involved.
Contracts
In California, the length of time a creditor has to file a contract lawsuit depends upon whether the contract is an oral contract or a written contract. The statute of limitations on an oral contract in California is two years. A lawsuit based on a written contract must be filed within four years from the time that the cause of action occurs.
In California, a lawsuit over past rent payments owed must be filed within four years. The landlord must file the suit within four years of the time that the breach of contract occurred.
California lawsuits brought on the basis of credit cards and stated open accounts, such as revolving accounts must be initiated within four years from the time that the cause of action or breach occurred.
Judgments
A collection action based on a court judgment has a 10 year statute of limitations. Judgments issued by a California Court are enforceable within 10 years from the date of entry into the court record.
Time
Be aware of when the legal time starts to run on your debt. Many credit collectors will manipulate the dates of payments to confuse the consumer when attempting to collect a debt. The time starts to run for the purpose of the statute of limitations from the time that legal cause of action accrues. The legal cause of action arises or accrues at the time that the breach of contract or obligation occurred. The breach occurs at the time that a payment due is not made. In some cases where the breach of contract is not readily apparent to the creditor, the cause of action arises when the creditor knows, or reasonably should have known, that the cause of action has occurred.
