The type of debts you carry may influence how many years debt collectors could continue to pursue unpaid balances. As noted on the Maryland General Assembly website, plaintiffs may pursue civil lawsuits for debt collection as long as they file within the appropriate statute of limitations.
As described by Credit.com, Maryland allows collectors three years to file legal actions for money owed from written contracts and revolving debt. If you owe money through promissory notes, collectors may pursue the debt for up to six years.
The differences between these three types of debt
Credit cards, which reflect “revolving-debt” accounts, represent open-ended accounts that offer a credit limit and allow you to carry balances. Written contracts typically outline the details of loans; even loans made between friends may include written agreements with valid signatures, Maryland courts may enforce both debt types during their three-year statute of limitations.
Mortgages and student loans, with their longer statute of limitations, classify as promissory notes and come with written agreements that specify the loan’s principal and interest. As described by Bankrate, promissory notes generally include the number of monthly payments, due dates and the number of months required for repayment.
How judgments may affect collection activities
In some cases, debt collectors may file a legal action to obtain a judgment from the court. According to the Maryland Courts website, obtaining a judgment may allow collectors to pursue unpaid debts for up to 12 years. Aggressive collectors may also attempt to garnish wages under state law. Garnishments may not, however, exceed 25% of your paycheck for each pay period.
Creditors must follow state and federal collection laws when pursuing unpaid debts. In some cases, the timeframe for collecting may last longer than the statute of limitations if collectors succeed in obtaining judgments.