Ask the Law Librarian – Statute of Limitations on Co-Signing of a Loan
Q: In 2000, I co-signed for a close friend to get a cell phone (I believe that I also paid three hundred dollar deposit). Apparently, in November 2011, his service was terminated (we are estranged, so this is the most information I could get from AT&T). When I called in March 2012, to add a new AT&T internet service, I was declined and informed of this issue. The amount that is owed is over seventeen hundred dollars – I am assuming that the majority of that is termination fees.
AT&T wants me to file a fraud report for identity theft (?) with them and our local police so that they may start an investigation that would then hold me "harmless" for the debt incurred. This does not make any sense to me. I was never contacted regarding this debt or the status of my friend’s account at any time for the last twelve years; leading me to believe that everything was fine
Isn’t there some type of statute of limitation on co-signing that should expire if you are not notified about any irregularities from the creditor for TWELVE YEARS? Any information that you can provide will be greatly appreciated.
A: Last year we received a similar letter from a woman who had co-signed her sister’s car loan and was concerned about being responsible for the payments. I recommend reading this column for information regarding your rights and responsibilities as a co-signer, as it may answer some of your initial questions.
And you are correct that there may be an issue involving the statute of limitation for written contracts. The California Code of Civil Procedure Section 337 states that parties have four years from the date of breach in which to begin an action involving “any contract…founded upon an instrument in writing…” The statute’s application begins at the date of breach (however there are exceptions, as with most things in law) which may have occurred within the last four years. You can ask AT&T to validate the debt, which would give you the payment history and the most recent missed payments.
The passing of the statute of limitations does not preclude the creditor from trying to collect the debt, which may include filing a lawsuit against you. Rather, the statute of limitations is an affirmative defense used in trial to have the case dismissed. If the defense is raised in a timely and proper manner by the defendant, the case might be thrown out. The statute of limitations defense is by no means fool-proof given the complexities of this area of law, and I recommend consulting an attorney or visiting the local public law library to conduct further research. To find the law library nearest you, visit www.publiclawlibrary.org.
Finally, regarding the issue of identity theft: if indeed you know that you are a victim of identity theft, one of the first things you should do is file a police report. The Sacramento County Public Law Library has a helpful article on Identity Theft that provides information on how to proceed. However, if you are at all uncertain about why AT&T wants you to report such a crime, please consult an attorney or ask to speak with an AT&T supervisor to gain a better understanding of this request.
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