If a creditor or collection agency doesn't sue you within a certain amount of time, it is out of luck. That's because the law makes it clear that creditors are limited in how long they can pursue debtors who owe them. This window of time is known as the statute of limitations period, and it differs among states. In Maryland, the statutes range from one to three years, depending on the debt. If a creditor wins in court, it has an additional 12 years to collect.
In Maryland, credit cards are considered "open accounts." Open accounts are those in which an account holder can charge ongoing purchases against a credit limit set for the account. Monthly statements reporting the accrued balance are sent to the account holder. Card issuers have three years to pursue a cardholder for unpaid credit card debt in Maryland. This is because the statute of limitations for open accounts is three years in the state.
The state has three years to pursue a taxpayer for unpaid tax debt under Maryland's statute of limitations for tax obligations. This period runs either from the date the taxpayer filed his return or the date it was due, whichever is later. However, if the taxpayer changed his federal return and doesn't notify the Maryland Comptroller's Office of the change within 90 days, there is no limit on how long the state can pursue the taxpayer. On the other hand, if he does, the state has one year to determine whether the taxpayer owes any state taxes based on the change.
The statute of limitations for written contracts is three years. This means lenders have three years to sue a borrower who has defaulted on a loan. In the case of loans secured by collateral, such as car and mortgage loans, the lender typically takes back the collateral first and applies it to the debt. If a balance remains, the lender then sues the borrower for the deficiency.
If a creditor sues a debtor and wins, the judgment remains valid for 12 years. This means the creditor has 12 years to pursue the debtor using all the legal tools available to it. These typically include wage garnishment, property liens and bank account seizures. Before the 12-year period expires, the creditor can even return to court and renew the judgment for an additional 12 years.