New Ohio Law Shortens Allowable Time to Collect Debts

Some Ohio consumers will get some relief under a new law. Senate Bill 224, signed into law by Governor Kasich earlier this summer, reduces the amount of time that people and businesses have under the law to file a lawsuit over a breach of a written contract.

The law cuts the statute of limitations-the time period in which the law requires a lawsuit to be filed or be forever barred-from up to 15 years to only eight. As the law affects businesses, this new statute of limitation would also apply to debt collectors that often wrongfully file lawsuits against consumers to collect old debts. The bill had the support of most types of businesses, who wanted to rid themselves of the record-keeping hassle that the longer statute of limitations required.

It is important to note that the law does not prevent filing suit over debts older than the statute of limitations period. The burden is on the consumer to bring the issue of the debt's age to the court's attention, in order to get the lawsuit thrown out.

The law does, however, make it much easier to determine which debts are time-barred. Under the previous law, depending on the type of debt, the statute of limitations ranged from four to 15 years.

Your Rights Concerning Old Debts

In calculating the time left in the debt for statute of limitations purposes, the clock starts on the day that you stop making payments on the debt. For each payment you make on the debt, the clock resets and the debt is valid again for the entire length of the statute of limitations.

In most cases, once your debt is older than the statute of limitations allows, debt collectors cannot continue to collect on the debt, however you still owe the money. Since the money is still owed, it can negatively affect your credit score if you don't pay off the debt. However, you cannot be legally compelled to pay the debt. If a debt collector continues to contact you about the old debt, it is illegal under the Fair Debt Collections Practices Act.

If a debt collector violates the act, you have a right to sue and collect statutory damages. If you are being harassed by creditors over an old debt, contact an experienced attorney, who can assist you in collecting damages that you are entitled to.