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Edited by Hannah Locklear

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Hannah Locklear, BA

Hannah Locklear is SoloSuit’s Marketing and Impact Manager. With an educational background in Linguistics, Spanish, and International Development from Brigham Young University, Hannah has also worked as a legal support specialist for several years.

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Summary: The statute of limitations on debt is the time period that a debt collector can sue someone for a debt they owe. In Vermont, the statute of limitations on credit card debt is 6 years, and whne you make a payment on an account, it resets the clock. If you are being sued for a debt you owe, SoloSuit can help you take a stand and win in court.

Every state enforces different laws when it comes to strict time limits for filing a civil lawsuit. This time period is called the statute of limitations. Typically, the statute of limitations exists to protect consumers from being sued for old debts. It also removes the indefinite threat of a lawsuit which can eventually be used as blackmail in some cases.

Because each state has a different law based on the statute of limitations on specific debts, where you live will determine this. Even if you incurred the debt elsewhere, it is according to your state of residence. The laws of the statute of limitations vary greatly, but the statute of limitations on credit card debt in Vermont is six years under Tit. 12 §511.

What is the statute of limitations on debt?

The statute of limitations is a law setting the maximum amount of time that a debt collection agency or creditor is able to pursue a lawsuit against you for owing a debt. Although the length of time for the statute of limitations varies from state to state, typically it ranges from four to 20 years. In the state of Vermont, the statute of limitations allows a debt collector to bring a collection lawsuit against a consumer for up to six years.

It's important to note that different types of debts might carry a unique statute of limitations. In Vermont, most debts have a statute of limitations of six years:

Vermont Statute of Limitations on Debt
Debt Type	Deadline in Years
Credit Card	6
Medical	6
Auto Loan	4
State Tax	6
Mortgage	14
Written	8
Oral	6
Judgment	10
Source: Findlaw

Making a payment on a time-barred debt restarts the clock

Because the statute of limitations can also apply to consumer debt, it means that a debt collector or creditor will have a specified amount of time in which they may collect on a debt. This can occur on consumer debt, but it depends on the type of debt.

Time-barred debt is debt that has passed the statute of limitations. Although the creditor or debt collector may no longer legally sue a consumer past this point, it does not mean that the consumer no longer owes the money. Time-barred debt simply means that you cannot go to court any longer.

What is important to know is that making any payment towards a time-barred debt may restart the time period of the statute of limitations. This means that if you pay on a credit card, borrow more money from a loan, or take action of any kind, the statute of limitations may restart, and you may be given a summons to appear in court.

The FDCPA and the statute of limitations

If you notice that suddenly debt collectors begin contacting you after a few years of a debt existing, it may be because the statute of limitations will soon expire. In this case, they may feel that they have nothing left to lose, and therefore, they might violate the Fair Debt Collection Practices Act (FDCPA).

The FDCPA protects consumers from unfair debt collection practices in all 50 states. Although this is a completely different issue from the statute of limitations, oftentimes they do go hand in hand. If the debt collector forces you to make even one payment on the debt, then it will reset the statute of limitations, and you may then be sued for a debt.

If a debt collector violates the FDCPA, even if you do start the statute of limitations over, you will not need to wait another six years. Instead, you will have grounds to file a counterclaim.

Debt collectors often violate the FDCPA

If a debt collector has used any of these tactics to get you to pay off a debt, you may be able to file a counterclaim against them and get compensation of up to $1,000 per violation:

Continued attempts to collect a debt that is not owed: If you are repeatedly being contacted about a debt you do not owe or one that you paid off before, then this is a violation of the FDCPA.
Illegal or unethical communication tactics: Whether this involves threats, profane or vulgar language, you may be able to have your case thrown out as this is a violation.
Failure to verify debt: If the debt collector fails to send you a written debt validation within five days, it is a violation. This must include the amount of the debt, the name of the creditor, and a notice of your right to dispute the debt.
Threatening or taking illegal action: If the agency threatens to sue you and the debt is past the statute of limitations, this is a direct violation. Additionally, if they threatened to garnish your wages or to confiscate your property after the statute of limitations has expired, this is a violation as well.
Lying: If the debt collector implies that they are someone other than who they are, lie in any way to collect the debt, or to collect an amount more than what is actually owed, it is a violation.
Informing of a third party: If a debt collection agency informs anyone besides you, your spouse, or your attorney of your debt without your written permission, then this is a violation.
Excessive phone calls: The collection agency may call you, but not excessively. This means they cannot make several calls in one day or in a row.

Fight debt collectors with the statute of limitations

The statute of limitations is a defense used when fighting a debt. After ignoring a debt for some time, a debt collector will summon you to court in order to sue you for a debt lawsuit. During this time you have the opportunity to defend yourself by responding to the case.

The most important thing to remember is that if you do not respond to the lawsuit within the deadline, then you will receive a default judgment. This means you will automatically lose the suit, and the debt collectors can garnish your wages or put liens on your property in order to get the money. In Vermont, you have 21 days to respond to a debt lawsuit if it is a regular civil case and 30 days if it is a small claims case ($5,000 in question or less).

If the statute of limitations has expired, then it can be used as an affirmative defense in your Answer. SoloSuit can help you assert your affirmative defenses in your Answer document.

If you cannot prove that the statute of limitations has expired, then you have two other options. The first is to prove the debt is not yours, and the second is to prove there has been an FDCPA violation. If you cannot do any of these things, then you should attempt to negotiate the debt as a settlement. Just remember not to ignore the debt because this will lead to nothing other than a poor credit report and garnishments.

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