Every state has its own statute of limitations in place for handling legal proceeding, and those limitations vary across the board. When you're facing the possibility of a creditor taking you to court for an alleged unpaid debt, it's important to know just how long that can hang over your head.
Function
In order to keep the Missouri court system from seeing an influx of lawsuits for alleged unpaid debts, the state places a statute of limitations on filing a new case against a debtor. If there was no statute of limitations in place, then creditors could pursue unpaid debts through the court system years after they accrue. This would not only be detrimental to courtroom dockets, but also to many unsuspecting debtors who thought they paid the money they once owed or someone forgot it a long time ago.
Open Accounts
The statute of limitations on credit collection cases in Missouri applies to two types of agreements. Open accounts, such as credit cards and oral agreements, have a limitation of five years for filing a lawsuit against a nonpaying debtor according to Section 516.120 of the Missouri Revised Statutes. Open accounts also include situations in which the creditor, such as a plumber or a doctor's office, sends out a bill for a product or service. Even though there was no written agreement to pay, the provision of the product or service sets forth the implication for provision of payment.
Written Contracts
The other type of agreement under the statute of limitations for debt collection in Missouri is a written contract. This is, quite plainly, a written agreement between two parties in which one will provide a product or service and the other agrees to pay for it. Such agreements most often apply to services provided by businesses like landscaping, construction or an attorney. The statute of limitations on written agreements in Missouri is 10 years according to Section 516.110 of the Missouri Revised Statutes.
Commencement
The Missouri statute of limitations for debt collection commences on the date of the last viable transaction for the debt. On open accounts, this is the date of the last invoice or partial payment before lawsuit proceedings. For oral agreements, the statute of limitations commences on the date that the creditor provides products or services, or on the date of the last payment. For written contracts, the statute of limitations commences on the date of the signed agreement, or if written into the contract, when the debtor should make the last payment.
Judgment
The intended goal of the creditor in filing a lawsuit is to obtain a Missouri judgment against you. If the creditor does so within the specified time frame and has sufficient proof that you owe the alleged debt, then the court will likely rule in the creditor's favor, which could lead to a garnishment of your bank account or wages.
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