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If a creditor does not file a suit against buyer for recovery of price with is 3 years, the debt becomes
- a)Time barred and irrecoverable
- b)Time barred and recoverable
- c)Not time based
- d)None
Correct answer is option 'A'. Can you explain this answer?
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If a creditor does not file a suit against buyer for recovery of price...
B'coz maximum time limit for time barred debt is 3 years. After 3 years debt become irrecoverable
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If a creditor does not file a suit against buyer for recovery of price...
Understanding Time Barred Debts
In legal terms, a debt becomes "time barred" when the creditor fails to take legal action within a specified time frame. In many jurisdictions, this period is typically three years for recovery of price claims. If a creditor does not file a suit within this time, several implications arise.
Key Points on Time Barred Debt:
- Legal Framework:
- Statutes of limitations govern how long a creditor has to initiate a lawsuit for debt recovery.
- For most contracts, including sales agreements, this period is commonly three years.
- Effect of Expiry:
- Once the three-year period elapses without any legal action, the creditor loses the right to enforce the debt through the courts.
- Although the debt technically still exists, it is considered unenforceable.
- Irrecoverable Nature:
- After the expiration of the limitation period, the debtor can raise the time-barred defense in court.
- This means that even if the creditor attempts to recover the debt later, the debtor can legally refuse payment, rendering the debt irrecoverable through legal means.
- Conclusion:
- Therefore, the correct answer is option 'A': the debt becomes time barred and irrecoverable if no action is taken within the designated timeframe.
In summary, creditors must act promptly to enforce their rights; otherwise, their claims may become time barred and unenforceable, leading to financial losses.
In legal terms, a debt becomes "time barred" when the creditor fails to take legal action within a specified time frame. In many jurisdictions, this period is typically three years for recovery of price claims. If a creditor does not file a suit within this time, several implications arise.
Key Points on Time Barred Debt:
- Legal Framework:
- Statutes of limitations govern how long a creditor has to initiate a lawsuit for debt recovery.
- For most contracts, including sales agreements, this period is commonly three years.
- Effect of Expiry:
- Once the three-year period elapses without any legal action, the creditor loses the right to enforce the debt through the courts.
- Although the debt technically still exists, it is considered unenforceable.
- Irrecoverable Nature:
- After the expiration of the limitation period, the debtor can raise the time-barred defense in court.
- This means that even if the creditor attempts to recover the debt later, the debtor can legally refuse payment, rendering the debt irrecoverable through legal means.
- Conclusion:
- Therefore, the correct answer is option 'A': the debt becomes time barred and irrecoverable if no action is taken within the designated timeframe.
In summary, creditors must act promptly to enforce their rights; otherwise, their claims may become time barred and unenforceable, leading to financial losses.
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If a creditor does not file a suit against buyer for recovery of price with is 3 years, the debt becomesa)Time barred and irrecoverableb)Time barred and recoverablec)Not time basedd)NoneCorrect answer is option 'A'. Can you explain this answer?
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If a creditor does not file a suit against buyer for recovery of price with is 3 years, the debt becomesa)Time barred and irrecoverableb)Time barred and recoverablec)Not time basedd)NoneCorrect answer is option 'A'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about If a creditor does not file a suit against buyer for recovery of price with is 3 years, the debt becomesa)Time barred and irrecoverableb)Time barred and recoverablec)Not time basedd)NoneCorrect answer is option 'A'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for If a creditor does not file a suit against buyer for recovery of price with is 3 years, the debt becomesa)Time barred and irrecoverableb)Time barred and recoverablec)Not time basedd)NoneCorrect answer is option 'A'. Can you explain this answer?.
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