New Law Effective October 1, 2016
Sec. 53. (NEW) (Effective October 1, 2016) (a) For the purposes of this section, “creditor” has the same meaning as in section 36a-645 of the general statutes.
(b) No creditor or consumer collection agency that purchased debt shall initiate a cause of action to collect the debt owed by a consumer debtor when such creditor or consumer collection agency knows or reasonably should know that the applicable statute of limitations on such cause of action has expired.
(c) Notwithstanding any other provision of law, when the applicable statute of limitations on a cause of action to collect debt owed by a consumer has expired, any subsequent payment toward or oral or written affirmation of the debt owed by the consumer shall not extend the limitations period within which the creditor or consumer collection agency that purchased the debt may bring the cause of action.
Parts (b) and (c) apply to debt buyers
For part (b), it is illegal for a creditor or consumer collection collection to start a collection lawsuit if it should reasonably know that the statute of limitations has expired. Typically, the statute of limitations runs from the date of the last payment.
For part (c), it was not uncommon for a debtor to affirm (acknowledge a debt) or make a small payment on a debt, right before or after the statute of limitations would have expired. The acknowledgment or payment extended the statute of limitations form the date of the acknowledgment or payment. Under the new law, the affirmation or payment to a debt buyer does not extend the statute of limitations.
Normally in Connecticut, the statute of limitations on purchased debt is 6 years from the date of the last payment.
Attorney Robert M. Singer
Law Offices of Robert M. Singer, LLC
2572 Whitney Avenue
Hamden, CT 06518