Under the Ohio state law, debt expires. The statute of limitation is aimed at preventing a lifelong claim on a debt that has been defaulted. For example, six years is the time frame within which a creditor can sue to recover debt on a written contract or revolving credit account. But if you service your account by making a payment or even making contact with the creditor after an initial default in the process of re-aging your debt, the creditor will set your account's due date back to its current amount.
Payment After Defaulting
Debt re-aging occurs when you make payment after defaulting. If for example, you defaulted on your credit card payments and, in a bid to improve your credit score, you decide to make some payment on your account three years later, your debt has re-aged. The three years that have elapsed under the statute of limitation are wiped out. If you are unable to make another payment on the account, it entails a fresh counting of six years has started before the time frame within which the creditor has a claim to his debt expires.
The Creditor's Right to Collect Debt
When debt has re-aged, the creditor has more time to file a suit in an effort to collect a debt. That is why most consumer advocates now advise debtors not to acknowledge old debt to prevent inadvertently resetting the time frame on the statute. Creditors might try to use various ways to set the account due date back to current even simply by the fact that the creditor has acknowledged that he owes and you were willing to settle. If you are actually willing to pay off the debt, you have an advantage. A consumer may decide to re-age the debt in exchange for removing late-payment activity from the credit record in an effort to improve a credit score.
Federal Law
The law on the statute of limitation in Ohio is complemented by the the federal law. The Fair Debt Collection Practices Act governs how and when collectors can contact consumers to collect debt. Occasionally, a debt contract might stipulate that the creditor will only file suit in the jurisdiction where the creditor is located. The lending company might be in Utah, for instance, and the debtor in Ohio. If the contract stipulates that the laws governing the state of the creditor determine the terms of the contract, the Utah statute of limitation will apply.
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