A time-barred debt is a debt that has a time limit for how long a creditor can sue you for nonpayment. This time limit is known as a statute of limitations. Indianas law on time-barred debts is laid out on the Indiana government's website.
Types
Time-barred debts are divided in four categories, and each of these categories often has its own statute of limitations determined by the state. The four categories are oral and written contracts, promissory notes and open-ended accounts.
Oral Contract
The statute of limitations on an oral contract in the state of Indiana is six years. An oral contract is when you verbally agree to pay a debt without signing a paper contract. This type of contract is harder to prove in court than a contract that is written and signed on paper.
Written Contract
The statute of limitations on a written contract in the state of Indiana is 10 years. A written contract is a contract signed by you and the creditor in which you agree to pay the money back. This can be any papers that you sign in agreement to pay back a debt, whether the creditor is a company or an individual.
Promissory Note
The statute of limitations on a promissory note in the state of Indiana is 10 years. A promissory note is a written promise that you will pay the debt within a specific schedule and at a set interest rate. For example, students getting a Federal loan for college may sign a promissory note with their school before receiving any funds.
Open-Ended Accounts
The statute of limitations on open-ended accounts in the state of Indiana is six years. Open-ended accounts are different from the three other forms of time-barred debt because they have a varying, revolving balance. A good example of an open-ended account is a credit card.
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