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Statute of Limitations on Bad Debt

Published Friday, February 10, 2023 by Alan Holdren

You need to watch what and how you do everything in regards to the Statute of Limitations. Limits on when an account can be brought into litigation vary from state to state. In Indiana, the rules are 6 years and 10 years. 6 years for all open-ended and oral contracts and 10 years for all written contracts and promissory notes. Payments can be requested outside of these dates, but collection through legal action is prohibited. We have always taken a simple, but safe position on accounts that when they pass the time limits that we cancel and return the accounts and not risk a possible fair debt violation for us or our collectors.

A great reference document is ACA (American Collectors Association) Doc 1119 3/29/2005 Fastfax. I would suggest a consultation with your local counsel on your particular situation, but this should give you at least a general thought as to one agencies strategy in dealing with this issue.

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