The Oldeadline State

Any creditor (business or person) seeking to collect a debt in Maryland is subject to strict time constraints under the law.  Maryland law usually requires that a creditor file suit for recovery of a debt within three years from the date the debt came due, as dictated by the terms of contract. See §5-101, Cts. & Jud. Proc., Md. Code Ann. In legalese, the deadline for filing suit is termed the “statute of limitations.” The statute of limitations for medical debt is three years from the rendering of service by the provider, the date of treatment. A breach of contract claim to recover revolving debt, like credit card debt, must be filed within three years after default, the date the borrowed failed to make a required minimum payment.

A common departure from the usual three-year statute of limitations lies in any dispute over the sale of goods. Under Article 2 of the Maryland Uniform Commercial Code (UCC), a creditor has four years from the date of default to sue for outstanding debt owed on a good. See §2–725, Com. Law, Md. Code Ann. Having issued a consumer auto loan, for example, a bank must file a suit for breach of contract against the driver/borrower within four years after the borrower defaults.

In its 2020 decision, Daughtry v. Nadel, 248 Md. App. 594 (2020), Maryland’s lower appellate court ruled that no statute of limitations applies to real estate foreclosure actions in Maryland. The Daughtry Court held both the ordinary three-year statute of limitations and the heretofore-commonly-construed 12-year statute limitations to be inapplicable.   

Maryland’s 7-year limitation on collecting from a citizen a judgment for back taxes is obviated in practical terms upon the conversion of such a tax judgment into a tax lien, which carries a 20-year statute of limitations.

Regardless of the manner of issuance (trial, affidavit, default, consent, confessed), a monetary judgment is typically valid for 12 years from the date of entry of the judgment, i.e., issuance by the court. A judgment may be renewed once, affording a creditor an additional 12 years to collect. See Md. Rule 2-625. In sum, a creditor may enforce, or collect upon, a properly renewed judgment for 24 years after its entry by the court. The 12-year clock only begins to toll at the time the court order takes effect or, as in the case of certain installment payments, upon the payment due date set by the court order.

Our upcoming series of posts will offer readers a primer on obtaining the requisite information about a debtor and its assets view of the basic remedies for collecting a money judgment in Maryland.

Call (443-595-9189) or email (Robert@lorgl.com) me to collect outstanding receivables.