The original lender frequently sells credit card debts, car loans, and other debts to 3rd parties to collect. So, this third party ends up suing the debtor. These lawsuits sometimes occur many months, and often many years, from when the debtor stopped paying the debt. In examining options, the debtor often has a question about the statute of limitations (the time limit to sue); it doesn't help that Colorado has a somewhat confusing statute of limitation, so let's put the issue to rest.
To sue for a debt, any debt, the Colorado statute of limitation is 6 years (C.R.S. 13-80-103.5(1)(a)).
But wait a minute, isn't the Colorado statute of limitation on contracts 3 years? Yes it is (C.R.S. 13-80-101(1)(a). Isn't my agreement to pay the debt a contract? Yes it is? At this point, it is helpful to understand that you can have a contract for actions other than paying debt. The 3 year rule is the general rule, but the 6 year rule is specific to actions to recover a debt. So, if the lawsuit is about collecting an amount of money that is determinable (e.g. known), the 6 year statute of limitation applies.
For example, let's say Bob Borrower goes to a car dealership to buy a car. Like most people, he finances the vehicle for five years. Two years later, Bob stops making payments; the lender repossesses the car and sells it at auction. After auction, Bob still owes $8,000. The statute of limitation is 6 years because the subject matter of the lawsuit is collection of a debt.
However, let's say Bob goes to the car dealership to buy a car. He buys a new pink corvette, the only pink corvette available in the U.S. He leaves the car overnight with the dealership to get detailed. When Bob returns the next day, the dealership refuses to give him the car because someone offered to pay the dealership double what Bob paid. If Bob sues the dealership, he is suing on the purchase contract to force the dealer to deliver the vehicle; Bob's lawsuit is subject to the 3 year statute of limitation.
The Colorado statute of limitation to sue for credit cards, deficiency balances, or loans of any kind, is 6 years.
Perspective: Being sued by creditors is a mere symptom of a larger problem, it is best to be proactive to cure the underlying cancer (debt) as opposed to treating the symptom which is the lawsuit.
Colorado Statute of Limitation to Collect a Debt?