Maine’s Limitation Period Process Changed for Debt Collectors

Most of the statutory revisions made by the most recent session of the Maine Legislature went into effect on October 15, 2015. One of these revisions changed the process for determining the limitation period for actions taken against consumer debtors by debt collectors.

Pursuant to 32 M.R.S.A. § 11013(8), debt collectors may not commence a lawsuit or arbitration against a consumer debtor more than 6 years after the date of the consumer’s last activity on the debt (unless a shorter period is provided by Maine law, in which case the shorter period would apply). As 6 years was the standard limitation period prior to the enactment of this statute, the only significant change made by this portion of the statute is that debt collectors may no longer apply the 20-year limitation period when collecting on a witnessed note.

The more significant change is found later in subsection 8, which states that once the applicable limitation period expires, no subsequent activity by the consumer on the debt can revive the right of a debt collector to commence a lawsuit or arbitration regarding the debt. The limitation period was previously based solely on the date of the consumer’s last activity, regardless of the frequency of that activity.

This change only applies to debt collectors that commence a lawsuit or arbitration to collect a consumer debt. However, the definition of debt collector includes attorneys who collect debts on behalf of clients as a primary part of their practice. Therefore, although original creditors will still only need to establish the date of the most recent consumer activity if pursuing an action on their own or when represented by an attorney who does not normally collect debts, original creditors will be subject to this new statute if they choose to be represented in a collection action by an attorney who maintains a debt collection practice.

This process change will not have an immediate impact, because this statute is not retroactive. Accounts with a last consumer activity date prior to October 15, 2015 will not have to prove that the limitations period did not expire at some point during the history of the account. As time passes and accounts in collection begin to have a last activity date after October 15, 2015, debt collectors will need to ensure they obtain a complete payment history from the original creditor so they can prove that the limitation period did not expire prior to the last activity date.

The creditors’ rights attorneys at Gosselin & Dubord, P.A. are experienced litigators whose consumer debt collection clients include credit unions, banks, finance companies, lessors and debt buyers from all over the country. If you have any questions regarding collection of consumer debts or need representation in connection with any creditor matter in Maine, please contact Gosselin & Dubord, P.A. at 207-783-5261 or collections@gosselindubord.com.