Bill collectors are companies and individuals who have special skills in the collection of unpaid debts. A bill collector may attempt to collect an unpaid bill or a debt stemming from another kind of transaction through a variety of means. However, most debt collection methods are only available to a debt collector after he has filed a lawsuit against you. In Kentucky, this lawsuit must be filed before the statute of limitations expires.
Debt Collection
Technically, once a debt has been incurred, the debt is legally owed to the creditor until the debtor dies. However, the debt is only effectively collectible for as long as the bill collector or the party attempting to collect payment on the debt can sue. After the party has sued and won a judgment against the debtor, he can attempt more aggressive collection methods, such as garnishment and asset seizure.
Statute of Limitations
The length of time that a debt collector has to sue for the recovery of an unpaid debt is set by the statute of limitations. Each state has its own statute of limitations. For example, in Kentucky, a debt stemming from an oral contract has a statute of limitations of 5 years. The statute of limitations starts the day that the debt went delinquent after which is was never paid up again.
Kentucky Laws
In Kentucky, the precise statute of limitations on a debt will depend on the kind of debt. A debt stemming from an open account or from an oral contract has a statute of limitations of 5 years. However, a debt stemming from a written contract, a domestic judgment or a foreign judgment has a statute of 15 years. A debt from a sale of goods is 4 years and a debt from a promissory note is 6 years.
Considerations
In some cases, particularly in the case of a legal judgment, the judge can order the statute of limitations for a particular case to be extended or renewed. In addition, the statute of limitations marks the time by which the case has to be filed, not the time by which the case has to have been won. So, sometimes, a bill collector will file a lawsuit just before the statute is set to expire.
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