When debt becomes “time-barred” in Ohio

On Behalf of | Aug 17, 2021 | Firm News |

With credit so easily available to most Ohio consumers, it is easy for debt to quickly spiral out of control and become unmanageable. When this happens, there are several courses of action borrowers take. One common response to oppressive debt is to simply ignore it.

Though a huge mistake for so many reasons, borrowers ignore old debt in the hopes that it will go away. While debt never really disappears, this tactic may work if collectors fail to take appropriate collections actions before the debt becomes “time-barred.” For this reason, collectors should familiarize themselves with the Ohio statute of limitations on debt and what actions they may and may not take once the time limit runs out.

The statute of limitations on debt in Ohio

According to Debt.org, the statute of limitations on debt in Ohio is six years. This is the case regardless of what type of debt a person amasses, ranging from credit card debt to mortgage debt to tax debt. The clock begins to run backward on the date the borrower made the last payment or when the debt became overdue, whichever happened more recently. Once the six-year mark passes, the debt becomes time-barred. Before the six years is up, however, the creditor may use any and all legal means to collect the past-due amount, including suing the borrower.

Collectors’ options once a debt becomes time-barred

Unfortunately, and according to the Federal Trade Commission, once a debt becomes time-barred, a collector cannot sue the borrower for the money owed. In some states, collectors cannot even contact default borrowers once the statute of limitations runs out.

Though collectors have few options when it comes to collecting time-barred debt, some states do allow for exceptions. For instance, if a borrower makes a payment on an old debt, or if he or she even acknowledges that the debt exists, the clock resets and a new statute of limitations period begins. In short, the debt is no longer time-barred.

Collectors must tread very carefully when attempting to collect a debt. Failure to adhere to the rules and laws that pertain to debt collection exactly could have costly consequences for the creditor.