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Bankruptcy May Be Your Option

Is there a statute of limitations on debt collection?

If you have ever been the subject of a debt collection effort by a collection agency, you may wonder how long they may persist in their efforts – in other words, just as there are statutes of limitations on many kinds of legal actions, is there one on debt collection as well? The answer is, "Yes and no."

Oklahoma state law does indeed establish statutes of limitations for debt collections, depending upon the type of debt involved. For debts based on written contracts, the statute of limitations for the creditor to file a legal action to collect the debt is five years. If the debt is based on an oral agreement, the statute limitations is only three years. This does not, however, mean that if the debt has not been paid within the statute of limitations period that the debt goes away. It does not, nor does the right of the creditor to continue to pursue you for payment. Thus, a creditor may continue on its own behalf or through a collection agency to try to persuade you to pay the debt, but absent the ability to take legal action the creditor's ability to make you pay would be severely limited.

If you are contacted by a collection agency about a debt that is outside of the statute of limitations, you would still be well advised to be circumspect in what you say in response to any communication from that agency (telephone calls from them in particular are usually recorded). It may be arguable in some states, for example, that if you acknowledge the existence of the debt that could be construed as restarting the statute of limitations.

Generally speaking, it is always preferable to either make an arrangement to pay any outstanding debt, even if that means re-negotiating with the creditor. Or, if elimination of debts is your goal and you cannot afford to pay them, bankruptcy may be something to consider. In either case, it can be helpful to consult with an attorney experienced with bankruptcy and debt collection law to advise you on what your legal options are.

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