Collector – October 2019 - 44

Time's Up?
The ins and outs of collecting
out-of-statute debt.

T

he concept of a statute of limitations
is widely used throughout the U.S.
legal system. A statute of limitations
establishes a time limit for bringing a legal
action or enforcing legal rights based on the
date when a claim accrued.
For the purpose of consumer debts, a
statute of limitations governs the amount
of time during which a legal remedy
(typically a lawsuit) may be sought by the
party that owns the debt or that party's
agents. Notably, if a suit is brought after the
expiration of the limitations period, it may
be seen as a violation of Section 1692e(5)
of the Fair Debt Collection Practices Act,
which prohibits, in part, the threat to take
any action that cannot legally be taken.
However, under the FDCPA and most
state laws, the expiration of a statute of
limitations does not actually extinguish the
underlying debt. While a suit may no longer
be filed to collect the debt, courts have found
that collection efforts such as phone calls and
letters may continue, provided a suit is not
filed and there are no threats of litigation or
other legal action.
A number of state legislatures have
examined the issue of collecting out-ofstatute debts in recent years. Some states
have enacted disclosure requirements
that must accompany collection attempts
related to out-of-statute debts. The
requirements vary by state, but all share
the same goal of notifying the consumer
that the debt is beyond the applicable
timeframe for pursuing legal action
or enforcement. It's also important to
note that two states (Wisconsin and
Mississippi) have laws that prohibit the
collection of out-of-statute debts entirely.
In addition to state laws, it's crucial to
understand that federal regulators such as
the Consumer Financial Protection Bureau

44

"Wisconsin and Mississippi have laws that prohibit
the collection of out-of-statute debts entirely."

have also taken an interest in monitoring
the practice of collecting debts that are
beyond the statute of limitations. The CFPB,
through enforcement actions, has asserted
that making settlement offers on out-ofstatute debts may violate the FDCPA if the
offer is not accompanied by a disclosure to
the consumer that the debt is beyond the
applicable statute of limitations.
With all of the scrutiny surrounding
the collection of debts that are beyond
the statute of limitations, collectors need
to be aware of state laws on the subject
as well as federal enforcement actions
related to this issue.
For an in-depth analysis of the federal
and state laws related to collecting
debts that are beyond the statute of

limitations, ACA members can review
the recently updated ACA SearchPoint
document #1119, Statutes of Limitation:
Collecting Out-of-Statute Debt. For
general information on state statutes
of limitation, see ACA SearchPoint
document #1122, Statutes of Limitations.
For information on settlement offers,
including offers on out-of-statue debts,
members can access ACA SearchPoint
document #1142, Settlement Offers.
ACA SearchPoint is filled with documents
that put important compliance information
related to the FDCPA, FCRA, TCPA,
state laws and many other topics at your
fingertips. To access ACA SearchPoint, visit
acainternational.org/searchpoint.

ACAINTERNATIONAL.ORG


http://www.acainternational.org/searchpoint http://www.ACAINTERNATIONAL.ORG

Collector – October 2019

Table of Contents for the Digital Edition of Collector – October 2019

President’s Page
Industry News
Best Practices
FYI
Collection Tips
Accessibility From Every Angle
Information Transformation
Calendar
Honor Roll
Education Spotlight
Behind the Name
A.I. is Transforming Compliance. Are You Ready?
What to Watch in 2020
ACA’s Industry Advancement Program Provides Amicus Support in Key FDCPA Statute of Limitations Issue
ACA SearchPoint
Ad Index
Membership
Last Word
Collector – October 2019 - Cover1
Collector – October 2019 - Cover2
Collector – October 2019 - 1
Collector – October 2019 - 2
Collector – October 2019 - 3
Collector – October 2019 - 4
Collector – October 2019 - President’s Page
Collector – October 2019 - Industry News
Collector – October 2019 - 7
Collector – October 2019 - 8
Collector – October 2019 - 9
Collector – October 2019 - Best Practices
Collector – October 2019 - 11
Collector – October 2019 - FYI
Collector – October 2019 - 13
Collector – October 2019 - Collection Tips
Collector – October 2019 - 15
Collector – October 2019 - 16
Collector – October 2019 - 17
Collector – October 2019 - 18
Collector – October 2019 - 19
Collector – October 2019 - Accessibility From Every Angle
Collector – October 2019 - 21
Collector – October 2019 - 22
Collector – October 2019 - 23
Collector – October 2019 - Information Transformation
Collector – October 2019 - 25
Collector – October 2019 - 26
Collector – October 2019 - 27
Collector – October 2019 - 28
Collector – October 2019 - 29
Collector – October 2019 - Calendar
Collector – October 2019 - Honor Roll
Collector – October 2019 - Education Spotlight
Collector – October 2019 - 33
Collector – October 2019 - Behind the Name
Collector – October 2019 - 35
Collector – October 2019 - A.I. is Transforming Compliance. Are You Ready?
Collector – October 2019 - 37
Collector – October 2019 - What to Watch in 2020
Collector – October 2019 - 39
Collector – October 2019 - 40
Collector – October 2019 - 41
Collector – October 2019 - ACA’s Industry Advancement Program Provides Amicus Support in Key FDCPA Statute of Limitations Issue
Collector – October 2019 - 43
Collector – October 2019 - ACA SearchPoint
Collector – October 2019 - Ad Index
Collector – October 2019 - Membership
Collector – October 2019 - 47
Collector – October 2019 - Last Word
Collector – October 2019 - Cover3
Collector – October 2019 - Cover4
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