Washington, DC asked in Consumer Law for Maryland

Q: in maryland, what starts the statute of limitations for debt collectors and what type of actions restart the clock?

I cannot find any state law on this information

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1 Lawyer Answer
Mark Oakley
Mark Oakley
  • Rockville, MD
  • Licensed in Maryland

A: The general SOL for a consumer debt in Maryland is 3 years from the later of (1) the date the last payment on the account balance came due and you failed to pay it, or (2) the date of the last payment you made on the account. In scenario #2, it is not uncommon for debtors to make a late payment, or get talked into sending a partial payment after the debtor has not paid for some time, which has the effect of restarting the 3 year SOL, so beware of doing this unless you have a plan and agreement in place to pay off the balance and the means to do so. Once upon a time, Maryland followed the common law doctrine of "acknowledgment of a debt" which means, if a debtor made an acknowledgment that they owed the balance due on an old debt obligation, then the SOL restarted from the date they made that acknowledgment. Creditors would trick debtors into responding to inquiries in a way that would confirm they understood they owed the money, even though the SOL had already expired. Maryland's highest court abolished that basis for extending the SOL. Some debts are based on written agreements, like a promissory note or loan contract, which the debtor signs on a signature line that also has the word "seal" imprinted on or under the same signature line, and in that case, the obligation is deemed a "contract under seal," and by statute, such contracts have a 12 year SOL. Nearly all promissory notes have the word "seal" on the signature line. Promissory notes that are not under seal, and are for goods or services that fall under the Commercial Code, have a separate SOL of 6 years. You should also be aware that "debt collectors" (that is, a creditor other than the original creditor on the debt) are required to sue consumer debtors in the jurisdiction of their residence, whereas an original creditor can sue where the contract for the debt was made as well as where the debtor lives, or in the place where the loan of contract states suits may be commenced. Statutes of limitations are generally regarded as procedural, so the SOL in the jurisdiction where suit is filed typically governs, as opposed to the SOL where the debt was entered into (if different). SOLs vary from state to state, and contract provisions can sometimes impact the analysis of what SOL applies. Finally, the defense of limitations is an "affirmative defense" that must be asserted, in writing, as part of the very first response to a complaint filed in court, or it will be deemed waived. Listing the SOL defense is nearly boilerplate in every answer so as to avoid the risk of waiving the defense, assuming it applies at all. Better safe than sorry.

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