Debt limitation is a regulation that restricts the amount of money that can be borrowed. It applies to individuals, businesses, and governments. Some states have laws that prohibit exceeding a certain borrowing limit, while others require approval from the public to borrow more. Debt occurs when money is owed to someone, either through an agreement or a purchase. There are various types of debt, such as joint community debt and personal consumer debt. Some debts are backed by assets like a house or car, while others are not. Failure to repay debt can result in financial difficulties and potential bankruptcy.
Debt limitation is the maximum amount of borrowing allowed for an individual, business, or government. Some state constitutions restrict states from taking on debt beyond a certain limit, while others require a vote to exceed the limit. For instance, California has a debt limitation of $300,000,000 for general obligation bonds, meaning the state cannot issue bonds beyond this limit without voter approval. This demonstrates how debt limitation operates in practice, ensuring that the state does not accumulate excessive debt and become financially unstable.
No, once the statute of limitations has expired, the creditor cannot legally pursue you for the debt.
In some cases, a creditor may be able to obtain a court order to garnish your wages to collect a debt.
Technically, a creditor can still file a lawsuit for a debt past the statute of limitations, but you can use the expired statute of limitations as a defence in court.
No, debt collectors are prohibited from contacting you at unreasonable times, such as before 8 am or after 9 pm.
Debt collectors are generally prohibited from discussing your debt with anyone other than you, your spouse, or your attorney.
No, you cannot be arrested for failing to pay a debt. Debt collection is a civil matter, not a criminal one.
Yes, if you default on a loan that is secured by property, such as a car or a house, the creditor may have the right to repossess the property.
In some cases, a creditor may be able to obtain a court order to levy your bank account to collect a debt.
Not all debts can be discharged in bankruptcy, such as child support, alimony, and certain tax debts.
Yes, it is possible to negotiate with creditors to settle debts for less than the full amount owed.
This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.
This glossary post was last updated: 17th April 2024.
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