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Know your rights: Time to clear up a few misconceptions about the law

By By Richard Alderman
June 14, 2014 at 1:14 a.m.


I was shopping for a new car. After a long day of haggling, I signed a contract. As soon as I got home, I realized I had agreed to spend more than I really can afford. My friend told me I have three days to change my mind. Is this true?

As far as the law is concerned, you generally do not have any time to change your mind after you sign a contract. There are only a few special types of contracts, such as time-share contracts, health-club contracts, door-to-door contract and contracts that place a lien on your home, in which you are given a period of time to change your mind and rescind the agreement.

In your case, unless you were misled or deceived into signing the contract, you have no legal right to change your mind or be released from the agreement. The dealer, however, may still agree to release you from your contract once you explain your situation.

I had an accident that was clearly the other person's fault. Unfortunately, he has no insurance. I guess I am just out of luck?

Whether someone has insurance does not affect liability. If the other person was at fault and caused the accident, he is liable for the damage to your car. If he had insurance, the insurance company would pay. If he doesn't have insurance, he still can be sued in small claims court.

If he doesn't make arrangements to pay after you win in court, he could lose his driver's license. I should add that the best way to avoid this problem in the future is to make sure you have full coverage on your insurance.

I stopped paying a credit card account and was sued about eight years ago. I just received a letter for an attorney saying he was going to take steps to enforce the judgment against me. I told him it had been more than seven years and he could no longer collect. Am I right?

There seems to be a lot of confusion about the time periods for collecting and enforcing a debt. First, a debt can be reported to the credit bureau, where it remains on your credit report for seven years. After seven years, it becomes obsolete and generally is no longer reported.

A lawsuit, however, must be filed within four years of when you stopped paying. After that time, you would have a defense for any lawsuit based on what is called the statute of limitations. Even after it is too late to sue, however, the debt still exists until it is paid or you file bankruptcy.

If you are sued within the four-year period, the judgment entered against you is enforceable to 10 years and may be renewed for another 10-year period. In your case, the creditor sued within the four-year period and was awarded a judgment. Based on what you say, the judgment is still enforceable.

Richard Alderman, a consumer advocate popularly known as "the People's Lawyer," is a professor at the University of Houston Law School in Houston. His column appears weekly in the Victoria Advocate. Write to him at UH Law Center, Houston, Texas 77204-6391. He also maintains a website at peopleslawyer.net.

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