How long can a creditor collect on a bad auto loan?
Get Legal Help Today
Compare Quotes From Top Companies and Save
Secured with SHA-256 Encryption
How long can a creditor collect on a bad auto loan?
Asked on March 12, 2012 under Bankruptcy Law, Wisconsin
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
It would be either 6 years or 10 years. In your state, the statute of limitations, or time to enforce a debt or obligation, on a written contract is 6 years--so an auto loan which was evidenced by a written contract is one which the creditor has up to 6 years to take action on. However, if there was not just a written loan agreement but also a promissory note, then the creditor would have up to 10 years, I believe.
Note that the time to bring a legal action to collect on the debt is not measured from when the loan was taken out--it's measured from when the borrower first defaulted, or failed to pay as per the terms of the loan. So say a loan was for 7 years, and the borrower defaulted in the 3rd year, and there was no promissory note, just a loan agreement--the lender has up to 6 years from that 3rd-year default, or up to 9 years in this case from when the loan was taken out, to take action.
IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.