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Should I File Bankruptcy if the Statute of Limitations has Passed?

The statute of limitations in Colorado for most debts, including credit cards, is 6 years. What does it mean?

If it has been more than 6 years since you stopped paying your credit card, your lender may still file a lawsuit against you to collect the debt. They will accomplish this by serving your with a summons and complaint which is then filed with your county court. They hope that you will not assert the statute of limitations as a defense. If you fail to assert the defense by filing a response to the summons and complaint, you have effectively waived the statute of limitations as a defense for that debt. The defense must be asserted to be effective.

Should you still file bankruptcy if the Statute of limitations has passed on most of your debts?

For most people, it is still worth it to file bankruptcy on stale debts for the sake of rebuilding credit. The passing of the Statute of Limitations does not make the debt go away. It just means the creditor is prevented from getting a judgment against you in court. The Statute of limitations (if asserted) removes the creditor’s remedy of getting a judgment but not their right to collect through other means outside of court. The debt collector may continue to call and send letters. Most importantly, the debt may still appear on your credit report.

Filing bankruptcy will zero out these debts on your credit report giving you a fresh start.