What is Revived Debt?
Are you struggling to repay debt and considering options like debt settlement or bankruptcy? It is important to know that, after the statute of limitations runs out on a creditor’s ability to collect your debt, you may not have to make a payment. However, there are ways in which you can “revive” a debt and reset the statute of limitations on that debt. What does that mean? In short, it means that a creditor or debt collector can once again take legal action against you in an attempt to recover the money you owe.
While the notion of “reviving” a debt might seem strange, it is something that happens somewhat commonly. Many debtors do not even realize that they are reviving a debt in taking certain actions. Given that reviving a debt can have significant financial consequences for a debtor, it is essential to understand how debt can be revived in Georgia.
Understanding Old Debts and Time-Barred Debts
Debt collection has a statute of limitations that is specific to the type of debt, and the statute of limitations is state-specific. Under Georgia law, most types of debts have a six-year statute of limitations. What this means in practical terms is that a creditor or debt collector can only take legal action against a debtor for that period of time. Once the statute of limitations runs out, a debt becomes a time-barred debt (or an old debt, as it might be described).
When a debt is time-barred, it is not wiped away. To be clear, it still shows up as a debt that the debtor owes. However, what is crucial to know about a time-barred debt is that the debtor cannot be legally forced to repay the debt. A creditor or debt collector cannot sue you for time-barred debt or have your wages garnished for time-barred debt, and cannot take any other action to compel you to pay. However, a debtor might unknowingly “revive” the time-barred debt or old debt.
How Debts Get Revived Under Georgia Law
Once debt becomes time-barred, a debtor does not have to worry about legal action forcing them to pay the debt. However, the debt can be “revived” and the statute of limitations can start over again.
How can debt be revived in Georgia? Under Georgia law, payment of time-barred debt or written acknowledgement of time-barred debt constitutes a “new promise” to pay that debt. In other words, the statute of limitations starts over again. The statute specifically says:
“A payment entered upon a written evidence of debt by the debtor or upon any other written acknowledgement of the existing liability shall be equivalent to a new promise to pay.”
What does this mean? If you are contacted by a debt collector about time-barred debt and you make a payment or you acknowledge the existence of the debt in writing, you may be “reviving” the debt. Once a debt is revived, a creditor or debt collector can once again take legal action for the period set forth in the statute of limitations.
Contact Our Georgia Debt Settlement Lawyers
If you have any questions about your debt liability or your options for managing debt that seems insurmountable, it is critical to seek legal advice. One of the experienced Georgia debt settlement attorneys at Konn Law Firm LLC can speak with you about your financial circumstances. We can answer any questions you have about the statute of limitations on debt collection and revived debt. In addition, we can provide you with more information about options for managing your debt, including debt settlement. Do not hesitate to reach out to our firm to learn more about how we can help you.
Sources:
law.justia.com/codes/georgia/2020/title-9/chapter-3/article-6/section-9-3-112/
law.justia.com/codes/georgia/2022/title-9/chapter-3/article-2/section-9-3-24/
