What is the staute of limiations on Payday Loan collection?
Question Details: I received an Online Payday loan on May 17,2006. On October 30, 2009 I applied for another Payday Loan. Well the orginial company that I applied with in 2006 decided to take their money out of my account without my authorization. Upon speaking with a representive with the LoanShop company, I was told that they could take money out of any account associated with my social. I was told that these companies have up to 3 years to collect on the debt the 3 year marker has passed and they took money from me is this legal.
Business Law Answers
I'm not sure where that 3-year period came from, but the statute of limitations on contract actions in your state is 6 years. So the company could still sue you in court and get a judgment.
The question that's left is the charge against your account without a judgment or garnishment order. That can only happen because you authorized it at some point, probably when you agreed to the 2006 loan, somewhere in the "terms and conditions" or other fine print. You'd need to go back and look at the 2006 loan contract, see exactly what it says about this, as a starting point to the bottom line answer.
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