Statute of
Limitations
A statute
of limitations is a decree in a common legal system that sets forth the
maximum period of time, after certain events take place, within which
legal proceedings
based on those events may be initiated.
In civil law systems, these provisions are usually part of the civil code
or criminal code and are often known collectively known as 'periods of
prescription' or 'prescriptive periods'.
Applications
of the Statute of Limitations
A common legal system
might have a statute limiting prosecution for crimes called misdemeanors
for up to two years. In such a situation for instance, if a person is
discovered to have committed a misdemeanor three years ago, he or she
cannot now be prosecuted for it. Or in the case of a contract for
instance, can only be sued upon for breach of performance from six years
after the contract was agreed upon initially or partially
performed.
In sharp contrast,
Canada for example, has a criminal statute of limitations period only for
summary or less serious offences. This period is for a duration of six
months from the date when the offence was carried out. Thus, for instance,
a Canadian can only be charged with an indecent act within six months of
the time of committing the offence, unless both the Crown and the
defendants agree. In the case of indictable or more serious offences, if a
hypothetical assailant committed sexual assault for instance, the
assailant could be charged any time in the future, even if the crime
happened decades ago.
A crime in the case of
a criminal prosecution or a cause of action in a civil lawsuit is believed
to have accrued when the event beginning its time limitation occurs.
Sometimes this is the event itself that is the subject of the law suit or
prosecution such as a crime or personal injury, but it may also be an
event such as the discovery of a condition one wishes to redress, such as
discovering a defect in a manufactured good, or else in the case of
controversial false memory syndrome cases where someone discovers memories
of childhood sexual abuse after undergoing corrective therapy long
afterwards.
An idea that is
closely related, though not identical, to the statute of limitations is a
statute of repose. This usually applies to buildings and properties, and
limits the time during which an action may lie based upon defects or
hazards connected with the construction of the building or premises. An
example of this would be that if a person is electrocuted by a wiring
defect incorporated into a structure in, say the year 1990, a state law
may allow his heirs to sue only before the year 1997ends in the case of an
open patent defect, or before the end of the year 2000 in the case of a
hidden defect. Statutes of repose do also apply to manufactured goods.
Manufacturers contend
that these edicts are necessary to avoid unfairness and encourage
consumers to maintain their property. Consumer groups however argue that
statutes of repose on consumer goods provide a disincentive for
manufacturers to build durable products and to notify consumers of product
defects as and when the manufacturers become aware of them. Consumer
groups also argue that such statutes of repose disproportionately affect
poorer people, since they are more likely to own older goods and may not
be able to get true value for money.
Real Estate Statue of
Limitations
In real estate you must begin the
lawsuit within a legally prescribed time period. If you fail to initiate
the lawsuit withing the time period, you may have no remedy in the courts.
Four examples for real
estate:
1) Three years to bring action for
removal of encroachments.
2) Four years to bring action on a
written contract.
3) Five years to bring action for
recovery of title to property.
4) Ninity days after filling a
mechanic's lien.
Individual State of
Limitation:
When you are in debt and cannot pay it
off, a creditor legally can collect their money from you. We all
know how they do it, from letters to phone calls asking to
you to pay it off. Statue of limitations gives creditors certain
number of years to collect their money. If they are not able to collect
that money in a certain years, legally they no longer come after
you.
Let's say that you live in
Alabama and you have applied for credit card with limit of $5,000. For
some reasons you are not able to repay that money on time and you fall
behind your payment. Creditor starts to call you and send you letters that
your account is in collection. Here is a tricky part. Creditors in this
case has right to collect their money in 6 years period, as stated in our
table below. After 6 years they can no longer come after you and it will
take anywhere 2-5 additional years until negative collection will be
removed from your credit report.
Ok, now about the tricky part.
How does the creditor know when the 6 year period start? It is not
necessarily the day you applied for your credit card. It is the day you
stopped paying off your bill. But here is the tricky part. Let's say that
you got a credit card in January 2000, than in April 2000 you stopped
paying your credit card. You are in default, and this is the start of 6
years period for creditor. Now let's say that in January 2001 you make a
payment, thinking you would like to pay it off. Well, the 6-year period is
erased and starts again when you default. This process is called
"restarting a clock" as called by most creditors.
Once you default on a credit card make sure you fully
understand statue of limitations. Our table below shows limitations for
each state.
Statue of Limitation
Table:
Oral Contract
- You agree to pay money loaned to you by someone, but this contract or
agreement is verbal; i.e. no written contract. Remember, a verbal contract
is legal.
Written Contract - You agree
to pay on a loan under terms written in a document, which you and your
debtor have signed.
Promissory Note - You have
agreed to pay on a loan via a written contract, just like the written
contract. The big difference between a promissory note and a regular
written contract is that the payments are scheduled and interest on the
loan is also spelled out in the promissory note. An example of a
promissory note is a mortgage.
Open Ended Accounts - These
are revolving lines of credit with varying balances. The best example is a
credit card account
|
State |
Oral
Agreements
|
Written
Contracts
|
Promissory
Notes
|
Open
Accounts
|
|
Alabama |
6 |
6 |
6 |
3 |
|
Alaska |
6 |
6 |
6 |
6 |
|
Arizona |
3 |
6 |
5 |
3 |
|
Arkansas |
3 |
5 |
6 |
3 |
|
California |
2 |
4 |
4 |
4 |
|
Colorado |
6 |
6 |
6 |
6 |
|
Connecticut |
3 |
6 |
6 |
6 |
|
Delaware |
3 |
3 |
6 |
3 |
|
D.C. |
3 |
3 |
3 |
3 |
|
Florida |
4 |
5 |
5 |
4 |
|
Georgia |
4 |
6 |
6 |
4 |
|
Hawaii |
6 |
6 |
6 |
6 |
|
Idaho |
4 |
5 |
10 |
4 |
|
Illinois |
5 |
10 |
6 |
5 |
|
Indiana |
6 |
10 |
10 |
6 |
|
Iowa |
5 |
10 |
5 |
5 |
|
Kansas |
3 |
5 |
5 |
3 |
|
Kentucky |
5 |
15 |
15 |
5 |
|
Louisiana |
10 |
10 |
10 |
3 |
|
Maine |
6 |
6 |
6 |
6 |
|
Maryland |
3 |
3 |
6 |
3 |
|
Massachusetts |
6 |
6 |
6 |
6 |
|
Michigan |
6 |
6 |
6 |
6 |
|
Minnesota |
6 |
6 |
6 |
6 |
|
Mississippi |
3 |
3 |
3 |
3 |
|
Missouri |
5 |
10 |
10 |
5 |
|
Montana |
5 |
8 |
8 |
5 |
|
Nebraska |
4 |
5 |
6 |
4 |
|
Nevada |
4 |
6 |
3 |
4 |
|
New Hampshire |
3 |
3 |
6 |
3 |
|
New Jersey |
6 |
6 |
6 |
6 |
|
New Mexico |
4 |
6 |
6 |
4 |
|
New York |
6 |
6 |
6 |
6 |
|
North Carolina |
3 |
3 |
5 |
3 |
|
North Dakota |
6 |
6 |
6 |
6 |
|
Ohio |
6 |
15 |
15 |
- |
|
Oklahoma |
3 |
5 |
5 |
3 |
|
Oregon |
6 |
6 |
6 |
6 |
|
Pennsylvania |
4 |
6 |
4 |
6 |
|
Rhode Island |
15 |
15 |
10 |
10 |
|
South Carolina |
10 |
10 |
3 |
3 |
|
South Dakota |
6 |
6 |
6 |
6 |
|
Tennessee |
6 |
6 |
6 |
6 |
|
Texas |
4 |
4 |
4 |
4 |
|
Utah |
4 |
6 |
6 |
4 |
|
Vermont |
6 |
6 |
5 |
6 |
|
Virginia |
3 |
5 |
6 |
3 |
|
Washington |
3 |
6 |
6 |
3 |
|
West Virginia |
5 |
10 |
6 |
5 |
|
Wisconsin |
6 |
6 |
10 |
6 |
|
Wyoming |
8 |
10 |
10 |
8
|
