The Nebraska statute of limitations on debt defines the window during which a creditor may sue a debtor to recover a debt.
In Nebraska, the statute of limitations on debt is 5 years from the last payment made. That means that creditors cannot sue you after that 5-year statute of limitations has run out. If the agreement was verbal, then that number is reduced to 4 years.
However, if the debt has lapsed for (let’s say) 3 years and you make a payment on it, then the date of last payment is reset. This means that the lender has another 5-year time period in which to sue.
I’m Being Harassed for Very Old Debts
The Nebraska statute of limitations on debt prohibits a creditor from suing you to recover that debt. It does not, on the other hand, prohibit them from trying to collect the debt.
Recently, it has become commonplace for companies to buy up debt that falls outside the statute of limitations and then harass or trick people into paying off these debts. In some situations, these creditors lack basic documentation proving that you owe the debt. In other words, they’ve purchased the right to harass you from a creditor who can no longer recover their debt.
Once you make a voluntary payment on the lapsed debt, it resets the Nebraska statute of limitations on debt enabling the creditor to sue you again. These folks are colloquially known as “debt scavengers” collecting on what is colloquially known as “zombie debt.”
It’s therefore quite important that you know what debts you owe, when the last time you paid was, and what the potential consequences are for paying or not paying an outstanding debt.
Debt Scavengers and Zombie Debt
In order to get people to pay on debt that has lapsed, isn’t theirs, or was discharged in bankruptcy, debt scavengers use a number of underhanded tactics. All of these are aimed at reviving the debt and resetting the statute of limitations.
Common tactics include:
- Promising to leave you alone for a small payment,
- Promising not to report the debt on your credit report for a small payment,
- Suing you or threatening to sue (which is illegal),
- Re-aging debt on your credit report (which is illegal),
- Verbally abuse or consistently harass you (which is illegal),
- Misrepresent themselves as a “litigation” firm (which is illegal).
Your best bet when dealing with firms such as this is to simply not speak to them, check your credit report, and if necessary, sue them.
I’m Being Sued for an Expired Debt
While it’s true that the Nebraska statute of limitations on debt prohibits creditors from suing debtors if the five-year period has lapsed, they have been known to try to anyway. This is because they are hoping the lawsuit scares you into compliance. On the other hand, this can be easily managed.
Assert Your Defense in Writing
You will want to file a written response with the court clerk asserting that the debt the creditor is trying to collect on has fallen outside the Nebraska statute of limitations on debt. You must explicitly claim this as a defense to the lawsuit.
The next thing that you’ll want to do is demand an account history for the debt in question. The debt collector is then obligated to produce documentation confirming that you have made a payment within the last five years. The documentation should show the date the payment was received, how much it was for, and in what manner the payment was made (bank transfer, check, cash, etc.).
If the debt collector cannot produce this information, then that should stop their lawsuit in its tracks.
You Can Counter-Sue
When the debt collector filed a lawsuit against you for an expired debt, they broke the law. The Fair Debt Collection Practices Act prohibits creditors from initiating a lawsuit on an expired debt. You could be entitled to $1000 in punitive damages and compensation for any attorneys fees.
Burke Smith Bankruptcy Attorney Can Help You Deal With Debt Collector Harassment
If you’re being harassed by creditors, know your rights. You do not have to pay on accounts that have lapsed beyond the Nebraska statute of limitations on debt. For more information, contact Burke Smith Law today.