Statute of Limitations for Debt Collection- Which State's Laws Apply?

Question

In 1996 I entered into a contract with a major Health Club chain. I then moved out of state and my last payment or any other contact was made in 1997. Apparently, they never acknowledged this and a Collection Agency in Utah has picked this up and is now calling me. I have drafted a letter stating that I dispute the claim and that the statute of limitations has expired. However, I read something about the Utah state SOL being reset if a written acknowledgement is sent and signed.

Which state's statue of limiations apply here? The state where I signed the contract (Florida), the state where I currently reside (CA), or the state in which the Collection Agency operates (Utah)?

Thanks in advance.

Answer 1

Once again I find myself correcting IC.....;)

The state statute can be either where the debtor lives or where the contract was entered into. The creditor does have the right to choose the state with the longer statute but the creditors or collectors location is moot. This is covered in Section 811 of the FDCPA and in Consumer Credit Protection Sec. 1692i.

You can not apply the laws of another state to someone residing in a differant state. True, the SOL has "tolled" in Florida, but they can't enforce it unless he moves back to Florida and becomes a resident again. For now, he falls under California laws.

The part about having the SOL getting restarted is with an acknowledgement of the debt is a "grey" area. No offer to pay the debt has been made. But this is a good example why you have to be very carefull about contact with creditors/collection agents. ALWAYS dispute the debt, and NEVER pay them until the debt has been properly validated.

Answer 2

It can either be the state in which you reside or the state where the contract was signed. Usually the the state where you signed the contract.
California is 4 years and Utah is 6 years for written contracts.
You are well beyond the SOL either way.

Answer 3

Utah SOL doesn't even fit into this, you are not bound to the laws of the state that the collection agency is located, unless you live in the same state.

I agree with the other posters, you are out of SOL on the debt.

Ca. for written is 4 years.
Fl. for written is 5 years.

They should not even be reporting on your credit reports anymore since the account is obsolete. If they are reporting it is a violation since they would have had to re-age the debt. So, if it is on your reports, dispute it off.

Go to the link I've provided and do some reading in the credit forum about SOL and there is samples of SOL letters that you can use for your situation.

All of the information on that site is "free" to use.

Answer 4

Now to throw a monkey wrench into the mix.

While MOST of the time, IF you are sued, they will sue where you live NOW and then you should use that state's SOL.HOWEVER, When you left FL before the 5 year SOL expired, that SOL TOLLED - meaning it stopped because you left the state.

So, it COULD be possible for a CA suing you to try to apply the FL SOL, which has not legally expired.

Most of the time this won't happen, but everyone should be aware that it CAN happen.

Answer 5

I think Florida's law will apply. The collection agency in Utah is acting as an agent for the Health Club - they are not law enforcement.

This link might help:

http://www.leg.state.fl.us/Statutes/index.cfm?App_mode=Display_Index&Title_Request=XLI#TitleXLI

Answer 6

I had the same with a health spa. In your contract there should be a clause that if you move over 25 miles from the spa you can break the contract and not have to pay any more. Check your paperwork, its usually in small print somewhere in the bottom.

Answer 7

I believe it's the state where u reside. Therefore, the statute of limitations would be CA as well.

Answer 8

SiFiDiva hit the nail on the HEAD CONGRATS to you!! It is nice to see someone else in here that can help dispell all this other bad advice!!