Louisiana's statute of limitations places some restrictions on creditors seeking to collect delinquent debts from residents. The statute doesn't erase debts that residents owe, but it does give them some protection from legal action that creditors and collectors may take. However, differences in the statute also may create problems for people who have delinquent credit card debts.
Louisiana Statute
Louisiana doesn't have the same statute of limitations for all types of debt, which could create debt-collection problems for residents. A statute of limitations restricts the amount of time creditors and debt collectors have to sue consumers to force them to pay delinquent debts. Louisiana has a three-year statute of limitations for credit card debts, but it increases to 10 years for other types of debts. The potential problem for residents is that some creditors may treat credit card debts as debts governed by written contracts. In such cases, a creditor may have up to 10 years to sue a Louisiana resident to collect a delinquent credit card debt instead of three years.
Written Contracts
Creditors may treat credit card balances as debts accumulated under written contracts because the accounts come with written cardholder agreements. Therefore, a creditor or debt collector could have up to 10 years to sue to collect a delinquent credit card debt. Louisiana residents who are facing a debt-collection lawsuit may need to consult with an attorney to determine if the three or 10-year time limit set by the state's statute should apply. In some cases, a court may have to decide if the creditor has the right to apply the 10-year time limit.
Debt Collectors
The Louisiana statute doesn't prevent debt collectors from contacting consumers even if the statute has expired and they can't sue to collect an old debt. Nonetheless, people should be careful about what they say to debt collectors. Just acknowledging you owe a debt could restart the statute of limitations and give the collector the right to sue you to recoup what you owe. Agreeing to a payment plan or making a payment toward an old debt also can restart the statute of limitations.
Other Debts
Louisiana's 10-year time limit on debt collection lawsuits also applies to oral contracts and promissory notes. Residents who make a verbal agreement to repay money someone loaned to them are under an oral contract. The lender has up to 10 years to file a lawsuit if the debt goes unpaid, but oral agreements are often difficult to prove in court. A mortgage is a type of promissory note that's collectible through a court judgment for up to 10 years. Promissory notes differ from written contracts because the note sets the borrower's scheduled monthly payments and interest rate.
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