The California Statute of Limitations – Thousands File Bankruptcy Who Don’t Need To.

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The California Statute of Limitations is a legal defense to debt collection. Many people file bankruptcy who don’t need to. Sometimes their lawyers don’t spot the issue.

As Los Angeles bankruptcy lawyers, we often rely on the California Statute of Limitations. The California Statute of Limitations is a very important debt relief tool. It is a great way to help our clients climb out of debt. The beauty is that you don’t have to file bankruptcy. If you have old debts and live in California, the Statute of Limitations could be your new best friend.

Let me explain. The California Statute of Limitations a legal deadline. It regulates how much time there is to file a lawsuit.  The California Statute of Limitations is really a whole group of laws. There is a  different California Statute of Limitations for different kinds of lawsuits. If you are injured in a accident, you normally have 2 years to file suit. If you are suing a new home builder for construction defects you normally have 10 years to file suit. The policy is to keep a claimant from sitting on their hands. The law favors the timeliness. A claimant must bring suit within a set time period. Otherwise, they are normally barred from suing. There is a practical reason for this. Over time, witnesses may disappear. Evidence may become lost. Memories fade. Courts want to decide cases based on reliable evidence. A long passage of time tends to make evidence unavailable.

The California Statute of Limitations for collecting a debt is usually 4 years. The most typical debt affected by this are credit card debts. A lawsuit to collect on a defaulted credit card debt usually has to be be filed within 4 years. Suppose you have been sued when it is too late? There is a legal proceedure that allows you to go into court and have the suit dismissed.

The California Statute of Limitations May Help You Avoid Bankruptcy. Bill Collectors Often Miss The Critical Deadline.

California Statute of LimitationsBanks constantly sell off old debts to professional debt collectors. Billions of dollars in old debts are sold every year. Some these debts are already past the The California Statute of Limitations. Many of these old debts are very close to expiration. This doesn’t stop debt collectors. They try to collect them anyway.  There is nothing illegal about asking you for payment on an expired debt. There is nothing illegal about accepting your voluntary payment of an expired debt. People pay these old debts because they are intimidated. They are freightened by the bill collectors. They don’t know their legal rights. The California Statute of Limitations can stop debt collection in many cases. We have seen cases where a person already filed bankruptcy, but they didn’t need to. Either their lawyer wasn’t thinking creatively, or simply neglected to tell the client.

We help many clients avoid bankruptcy. We will never recommend bankruptcy unless you need it. If we think a debt is already past the statute, we send a Cease and Desist letter to the bill collector. That usually gets rid of them, without bankruptcy.  If that was the client’s only debt problem, bankruptcy was avoided. We look to see how old your debts are. Are they close to expiration? If so we may advise a client to sit tight. By doing nothing, the time legal deadline often expires. After that we can send  a Cease and Desist letter to the bill collector. If that doesn’t work, a bankruptcy will usually fix it once and for all.

Do you like reading questions and answers from a Los Angeles Bankruptcy Specialist? You’re sure to like the “ASK LEON” question and answer column. Los Angeles Bankruptcy Specialist Leon Bayer answers real questions from readers. You will find it on the Nolo Publications bankruptcy blog web site. We are also found on Google+.  This blog is a publication of the Los Angeles Bankruptcy Law firm of Bayer, Wishman & Leotta. Learn more by reading our  Human Guide to Bankruptcy. Bayer Wishman & Leotta has the capability to handle emergency Los Angeles bankruptcy cases. Bayer Wishman & Leotta gives free consultations.
  • A REAFFIRMATION is an agreement made during a bankruptcy case between you and a creditor. You agree that a particular debt will not be discharged. The real reason you do it is to keep your car from getting repossessed. Many lenders will repossess your car unless you have entered into a reaffirmation agreement. You can read everything that we know about reaffirmations  in our FREE BANKRUPTCY GUIDE.

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Leon Bayer and Jeffrey Wishman are Los Angeles Bankruptcy attorneys. They have been practicing bankruptcy lawyers in Los Angeles for 37 years and are Certified Bankruptcy Specialists by the State Bar of California. These are lawyers who bring experience, skill and creativity to the highly complex area of bankruptcy law. At this Los Angeles law firm, the your initial consultation with an expert is free. Mr. Bayer is a coauthor of Nolo's The New Bankruptcy: Will It Work for You?, authors the “Ask Leon” series on Nolo’s Bankruptcy, Debt & Foreclosure blog, and writes on bankruptcy topics for Nolo’s website. In addition, Mr. Bayer devotes a significant number of hours to volunteer legal services. The State Bar of California has commended Mr. Bayer for this work every year since 2004.

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