What Is the Statute of Limitations for Collecting a Debt in Maryland?

Creditors, debt collectors and debt buyers must follow the guidelines and procedures outlined in the Fair Debt Collections Practices Act---FDCPA. The FDCPA is a federal law that pertains to each state, but it does not dictate the state statute of limitations for civil collection. Individual states retain the right to set time limits for debt collection. The statute of limitations for collecting a debt in Maryland is outlined within state law 5-101.

Definition

Statute of limitations is the specific period of time that the law allows for legal action in relation to civil or criminal matters. Collecting debts in Maryland, and every other state, is a civil matter. Maryland laws concerning the statute of limitations for debt collection are most often considered open contracts, but may fall under written contracts in the case of promissory notes. Open contracts and written contracts have the same time frame for collection in Maryland.

Time Frame

The statute of limitations In Maryland for open contracts, such as credit cards, and for written contracts is the same---three years. The three-year clock starts on the date that the last payment was posted to a credit card account or the date of last activity on a written contract. For example, a Maryland debtor with a posted payment on a credit card account dated October, 2009 may be sued for collection on that account until October, 2012, unless the debtor makes an interim payment. Additional payments to the account restart the statute of limitations clock.

Collections

Creditors, debt collectors and debt buyers have the right to continue collection activities after the statute of limitations in Maryland has expired. The statute of limitations means that the creditor may not win a judgment suit against the debtor on an out-of-statute debt if the debtor defends the suit based on the statute of limitations. A valid debt remains collectible, as long as the collectors adhere to the guidelines in the FDCPA.

Judgment Statute of Limitations

If a creditor sues a debtor in Maryland before the statute of limitations has expired and wins a judgment, the judgment has a separate statute of limitations for collection. Judgments in Maryland expire after 12 years and carry a 15 percent maximum annual interest rate. Judgments in Maryland may not be renewed. Once a creditor obtains a judgment, it is possible to levy bank accounts, seize personal property and place a lien on real estate owned by the debtor.