In Colorado, creditors are generally prohibited from obtaining a judgment on a debt from the last date of account activity. This could be the last date you made a purchase or made a payment. The deadline is known as the statute of limitations (SoL). There are many ways a creditor may toll the Sol which means extend the deadline. The SoL may be tolled after the debtor promises to pay or acknowledges liability for the debt.
Assuming the SoL has passed, it is an affirmative defense. This means that the creditor may still seek a judgment after the deadline has passed. As the debtor, you may assert that the SoL deadline has passed. If you do not assert the defense, the creditor may receive a judgment. The creditors will accomplish this by serving your with a summons and complaint which is then filed with your county or district court. The creditor hopes 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.
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