A bill has been passed in the Arizona Senate and is now working its way through the Arizona House of Representatives that would restart the statute of limitations to file lawsuits to collect on unpaid debts when a partial payment is made.
Currently, the statute of limitations in Arizona is six years. Under SB 1306, the statute of limitations would be restart any time a partial payment is made on a debt. The bill, if passed in the House and signed by the governor of Arizona, would retroactively apply to all payments made toward a debt on or after Jan. 1, 2012.
The bill would amend Section 12-508 of Arizona law, which currently reads: When an action is barred by limitation no acknowledgment of the justness of the claim made subsequent to the time it became due shall be admitted in evidence to take the action out of the operation of the law, unless the acknowledgment is in writing and signed by the party to be charged thereby.
The new language would add the following language, When an action for debt has accrued but is not yet barred by limitation and any payment is made toward the debt, the limitation period begins anew from the date of the last payment made, and change the current language to read, When an action is barred by limitation the right to pursue the action is not revived unless the party to be charged signs a written acknowledgment of the claim.
Consumer advocates are speaking out against the bill, which was sponsored by Sen. Vincent Leach, a Republican, and is being “backed” by the Arizona Collectors Association, according to a published report. The advocates said they did not know about the bill until after it was approved by the Senate. Unscrupulous collectors will tell individuals that if a minimal payment is made, then the collectors will stop calling, advocates claimed.
“if they get you on the phone and say, ‘you owe us $1,000, give us $5, we won’t call you anymore,'” said one advocate. “If they get that $5 payment, they just got six more years to sue.”
The House is scheduled to vote on the bill tomorrow.
