What is the Statute of Limitation on a car loan?
This is something that we’ve started to see more often.
They say you owe a certain amount of money, then they repossess for a certain amount, and then say that you owe the difference of those amounts.
“How long can do they have to sue me under the Statute of Limitation?”
In a debt collection lawsuit, it’s 3 years.
The debt collection agencies think it’s 6 years, however that isn’t the case.
However, it’s different when you have bought a car through a dealership.
The collection companies will maintain that they have 6 years to sue you, but with a car loan they actually have 4 years to sue you.
There are exceptions, but generally the Statute of Limitation is 4 years.
If you have any questions about this, feel free to call us at 1-205-879-2447.
The reason that they have 4 years to sue is because of the UCC, or Uniform Commercial Code.
The UCC states that if there’s a dispute about the sale of a good, which covers vehicles, then each party has four years to sue, or work it out.
However, these companies tend to wait until it’s been 5 or 6 years, which is after the Statute of Limitations has expired.
This time limit doesn’t start when the repossession happens, however.
At some point after you stop making payments, the car company, which could be someone like Santander, will decide that everything is due now.
Especially after a repossession.
This decision is what starts the clock running which is before the repossession.
If they wait longer than 4 years to sue you, and you haven’t made any payments they will put themselves in big trouble.
You should win your case in this situation, which gives you the opportunity for you to turn around and sue them for violating the FDCPA (Fair Debt Collection Practices Act).
If you live in the state of Alabama and you have any questions about what we’ve talked in about in this article, feel free to get in touch with us.
You can reach us by phone at 1-205-879-2447, or you can fill out a contact form and we will be glad to get in touch with you.
I look forward to chatting with you soon!
Have a great day.