New Hampshire’s Statute of Limitations on Debt – What You Need To Know
If you have old debts in New Hampshire, you may be wondering how long a creditor or debt collector can legally pursue you for payment. The answer lies in New Hampshire’s statute of limitations on debt.The statute of limitations sets a time limit for when creditors and debt collectors can sue you to collect on a debt. But it can be tricky to figure out exactly what that time limit is, because it varies based on the type of debt.This article will explain everything you need to know about New Hampshire’s statute of limitations on different kinds of debts. We’ll also give tips on what to do if an old creditor tries to collect on a time-barred debt.
An Overview of Statutes of Limitations
A statute of limitations is a law that sets a time limit on certain legal actions, like filing a lawsuit. Once the statute of limitations expires, the legal claim is no longer valid.The purpose of a statute of limitations is to encourage creditors to pursue debts in a timely manner. It prevents old claims from popping up unexpectedly and surprising debtors years later.The statute of limitations time period begins when the debtor defaults on the debt, meaning they stop making payments. The clock only stops if the debtor does something to acknowledge or restart the debt, like making a payment or signing a new agreement to pay.In New Hampshire, the statute of limitations varies from 3-20 years, depending on the type of debt. We’ll break down the specifics below.
New Hampshire’s Statute of Limitations by Type of Debt
Here are the statutes of limitations that apply to different categories of debt in New Hampshire:
- Written contracts – 20 years
- Oral contracts – 3 years
- Open-ended accounts (credit cards, etc.) – 3 years
- Promissory notes – 3 years
- Auto loans – 3 years
So for common consumer debts like credit cards, personal loans, and auto loans, the statute of limitations is 3 years in New Hampshire.That means if you stop making payments on a credit card, the credit card company has 3 years to sue you for the debt. After that, they’re out of luck.Some other types of debt have longer statutes of limitations, like debts from a written contract (20 years). Student loans also have exceptions that can extend the statute of limitations.
What Happens When the Statute of Limitations Expires?
When the statute of limitations clock runs out, it means the creditor or debt collector legally can’t sue you for the debt anymore. But that doesn’t get rid of the debt entirely.Under New Hampshire law, you still technically owe the debt even after the statute of limitations expires. There are a few key things to know:
- The creditor or collector can still ask you to pay voluntarily. They just can’t sue if you refuse.
- The debt may stay on your credit report for up to 7 years after you stopped paying.
- If you do make a payment or acknowledge the debt in writing, it can restart the statute of limitations.
- The creditor can still pursue other collection methods that don’t involve suing you, like selling the debt to another collection agency.
So don’t assume that an old debt completely goes away once the statute of limitations runs out. The creditor likely still views it as money you owe, even if they can’t sue for it.
Responding to Attempts to Collect Old Debt
Let’s say you stopped paying on a credit card 5 years ago. Now, out of the blue, you get a call from a collection agency demanding you pay the old debt. Here are some tips on how to respond:
- Ask for validation of the debt – Debt collectors must provide this if you dispute or request validation of the debt within 30 days. Make sure it’s actually your debt and the amount is correct.
- Review the statute of limitations – Make sure the statute of limitations has expired so they can’t sue you. In this example, it would be expired after 3 years.
- Don’t acknowledge the debt – Don’t make any payments or promises to pay. That can restart the statute of limitations.
- Send a cease and desist letter – To tell them to stop contacting you. Keep records of any further attempts to contact you.
- Know your rights – It’s illegal for collectors to make false statements or threaten you over old debts.
- Seek legal help – If you’re sued over a time-barred debt, be sure to respond and make the statute of limitations defense.
The Risks of Ignoring Old Debts
Some people hope that old debts will just disappear if they ignore them long enough. But this approach can backfire, so be cautious.Even after the statute of limitations expires, the creditor or collector might still:
- File a lawsuit, hoping you don’t respond so they get a default judgment.
- Pursue collection through other legal channels like garnishing bank accounts or seizing assets.
- Re-sell the debt to another collection agency and restart the process.
- Continue reporting the debt to credit bureaus, damaging your credit.
So while you can’t be sued directly once the statute of limitations runs out, the debts won’t vanish entirely if left alone. Having an action plan is better than ignoring the issue.
Strategies for Dealing with Old Debt
If you have old debts that you can’t realistically pay back, here are some strategies to resolve the situation:
- Communicate with creditors – Explain your financial situation and try negotiating reduced payoff amounts. Get any agreements in writing.
- Consider debt settlement – The creditor may accept a lump sum payment that’s less than what you owe as a settlement.
- Explore bankruptcy – This legally eliminates many old debts entirely through the court system.
- Watch out for scams – Avoid shady companies promising to make debts disappear. Research anyone you hire.
- Prioritize essentials – Focus on paying secured debts and current bills for housing, utilities, food, etc. first.
- Improve your credit – Pay all current accounts on time and dispute any errors on your credit reports.
With the right approach, old debts don’t have to haunt you forever. Understanding New Hampshire’s statute of limitations on debt gives you power when creditors come calling.We hope this overview has helped explain your rights and options when it comes to old debt in New Hampshire. The most important thing is not to ignore the problem – be proactive in handling old debts strategically. And know exactly when the statute of limitations expires so collectors can’t sue.