Dealing with debt can be overwhelming, especially when you feel like you owe more money to creditors than you have. It’s crucial to understand your rights and the legal limits that protect you, particularly concerning debt collection. In Maryland, the law sets specific timeframes for how long creditors can pursue a debt, offering some relief to those struggling with financial burdens. This article breaks down these limitations, focusing on what someone who owed more money to creditors than they had needs to know about debt collection in Maryland.
Maryland law recognizes the concept of a statute of limitations, which essentially sets a deadline for legal actions. When it comes to debt, this means creditors have a limited period to take you to court to demand payment. In Maryland, for most debts, creditors generally have 3 years from the date the debt becomes due to file a lawsuit. This is a significant protection for debtors. If a creditor waits longer than three years after the debt was due, they generally lose their right to sue you for it in court. There is a slight exception for debts specifically related to the sale of goods, which have a 4-year statute of limitations.
It’s important to understand what happens if a creditor does take you to court within this timeframe and obtains a court order, known as a judgment, requiring you to pay. In such cases, the creditor has a longer period to collect that debt. Specifically, in Maryland, a creditor has 12 years from the date of the judgment to collect the money owed. This might seem like a long time, but even this period isn’t indefinite.
Crucially, creditors have the option to “renew” a judgment. Within that initial 12-year period, a creditor can file a “notice of renewal” with the court. This action effectively resets the 12-year clock, giving them another 12 years to enforce the debt. This renewal process can continue, meaning a debt judgment can potentially remain enforceable for an extended period if creditors keep renewing it within each 12-year window.
For someone who owed more money to creditors than they had, understanding the 3-year statute of limitations on lawsuits is vital. If you are contacted about a debt that you believe is older than three years from its due date, you might be able to raise this “statute of limitations” as a defense if the creditor tries to sue you. To illustrate, if a debt became due on January 1, 2020, the creditor would generally need to file a lawsuit before January 1, 2023. Filing after this date would typically be barred by the statute of limitations. It’s also worth noting that even acknowledging the debt or making partial payments does not restart this 3-year period.
However, it’s important to be aware that the 3-year statute of limitations only restricts a creditor’s ability to sue you in court to obtain a judgment. It doesn’t stop them from attempting to collect the debt in other ways. Creditors or debt collection agencies may still contact you, send letters, or report the debt to credit reporting agencies. Maryland law, under the Maryland Consumer Debt Collection Act, does place restrictions on how they can attempt to collect the debt. For instance, they are prohibited from harassing you, calling at unreasonable hours, or contacting you at work if you’ve told them not to.
Regarding the 12-year limit on collecting on a judgment, this means that if a creditor has obtained a court judgment against you, their ability to enforce that judgment, such as through wage garnishment or seizing property, expires after 12 years from the judgment date, unless they renew the judgment. If you believe a judgment is older than 12 years and a creditor is trying to enforce it, you may have grounds to challenge their actions based on this 12-year limitation.
It’s also important to note specific situations. If a court has ordered you to pay a debt in installments, such as child support, the 12-year limitation might apply separately to each installment payment from the date it became due. This means even if the original order is older than 12 years, you could still be obligated to pay installments that became due within the last 12 years.
Finally, there’s a significant exception to the 12-year limitation. If you owe money to the government and the government has obtained a judgment against you, this 12-year limitation on collecting the debt does not apply. Government debts can be enforced indefinitely.
For someone who owed more money to creditors than they had, understanding these time limits in Maryland law is a crucial first step. While it doesn’t erase the debt, it provides important protections regarding how long creditors can legally pursue you through the courts and enforce judgments. Navigating debt can be complex, and if you are facing debt collection issues, especially if you believe a debt is time-barred, it’s always advisable to seek legal advice to understand your specific situation and rights fully.
