The statue of limitation in Texas is 4 years. The SOL begins to run with the Date of First Default. In almost all cases, the DOFD is 30 days after the last regular payment made on the debt (after which the debt was never current).
A statute of limitation is a law that limits the time period in which a lawsuit or other claim may be brought. Most legal actions have some time limit in which they must be filed or the person having the right to bring the claim loses out. For example, if you owe a debt, the law will specify the amount of time that the creditor has to bring a lawsuit to get a judgment for the debt. This time will vary from state to state and may vary depending on the type of debt. For example, it is common for debts arising from a written contract to have longer statutes of limitation (meaning the creditor has a longer time to bring the claim) than a debt arising from an oral contract.
In general, a SOL is defense to a claim, not an automatic bar to the claim. What that means is that in most cases, the claim can be filed and it is up to the defendant to raise the SOL as a defense. For example, suppose you owe a credit card debt to XYZ bank. Let’s say that under the law that applies to your debt, the SOL is 4 years. You stopped paying on the credit card account in 2000, thus breaching the contract and giving XYZ the right to sue you in court for a judgment for the amount you owe. But XYZ waits until this year to sue you, five years after it had the right to sue. That is past the period allowed by the SOL. XYZ is allowed to file the suit anyway. When you get served, you then respond by asserting the SOL as one of your defenses. The court would then dismiss XYZ’s lawsuit because it waited too long.
If you do not raise the SOL, then XYZ could get a perfectly valid judgment against you. So, don’t assume that because a SOL has expired that you do not need to respond to a lawsuit. Too many people make that mistake only to find out later that they were wrong.
The basic idea behind a SOL is to encourage parties to pursue their claims promptly. That has several benefits. First, it helps ensure that as much evidence as possible is available to help the court decide the case. The more time that passes before a claim is brought, the more likely it is that documents will get lost or destroyed, witnesses die or their memories fade, etc. Furthermore, the defendant should not have to worry forever about whether the claim will be brought. At some point, he should be able to move on and forget about it.
Finally, you should be aware of one other rule about SOLs and debts. In some states, if a SOL for suing on a debt expires and then the debtor confirms the obligation after that, the SOL may start anew and give the creditor the ability to sue for the judgment.
If you are confident that the SOL is truly expired (as explained and defined above), send each creditor a "CEASE & DESIST" letter telling them the debt is time-barred and they are to cease all collection activity. You can find a sample at
www.creditinfocenter.com/forms. Send the letters certified mail and request a return receipt.
Again, as explained above, a lawsuit can still be filed. You must be alert for any summons. If you receive a summons, you will need to respond to the lawsuit and raise the time-barred defense. Then the judge will toss the case.
