The Puerto Rico Court of Appeals recently upheld a lower court's decision to dismiss a debt collection case involving Island Portfolio Services, LLC and Nelson Pérez Declet. The court ruled that the case was barred by the statute of limitations, which significantly impacts the ability of debt collectors to pursue older debts.
The case, identified as TA2026AP00194, originated from a dispute over a credit card debt of $9,055.52 that Pérez Declet allegedly owed to Island Portfolio Services, acting as an agent for Fairway Acquisitions Fund, LLC. The ruling affects not only the parties involved but also sets a precedent regarding the enforcement of old debts in Puerto Rico.
Background
Island Portfolio Services, LLC, as the agent for Fairway Acquisitions Fund, LLC, filed a lawsuit against Nelson Pérez Declet to collect a debt linked to a credit card account with Banco Popular de Puerto Rico. The account in question was opened on January 12, 1985, and the debt was transferred to Island Portfolio Services on January 21, 2021. The company claimed that Pérez Declet had failed to pay the owed amount despite multiple requests.
The dispute escalated when Pérez Declet contested the existence of the debt, stating that the credit card account had been canceled by the bank. The lower court held a trial on January 24, 2024, where evidence was presented. However, Pérez Declet maintained that he did not recognize the debt, leading to a series of legal motions and hearings.
The Ruling
On September 16, 2025, the lower court ruled in favor of Pérez Declet, dismissing the case on the grounds of prescription, which is the legal term for the expiration of the time limit to bring a lawsuit. The court found that Island Portfolio Services failed to prove that the debt was still collectible under the law.
The court stated, "the demandante no logró acreditar... cual gestión oportuna que realizó el banco antes de traspasarle la cuenta del demandado para mantenerla vigente." This means that the plaintiff did not provide sufficient evidence to show that the bank took timely action to keep the debt valid.
The appeals court, led by Judge Lebrón Nieves, confirmed this decision, emphasizing that the statute of limitations for personal actions in Puerto Rico is 15 years. The court noted that the last documented effort to collect the debt occurred on September 1, 2023, which was too late to revive the claim.
Impact
This ruling has significant implications for debt collection practices in Puerto Rico. It reinforces the importance of timely action by creditors to pursue debts before the statute of limitations expires. The decision also highlights the necessity for debt collectors to maintain thorough records of their collection efforts to avoid dismissal of their claims.
Moreover, the court's emphasis on the need for evidence regarding the status of the debt at the time of transfer serves as a warning to both creditors and debtors. Creditors must ensure that they have clear documentation to support their claims, while debtors can rely on the statute of limitations as a defense against old debts.
What's Next
Island Portfolio Services may consider appealing the decision to a higher court, but details on any potential appeal were not provided in the court filing. There are currently no related cases pending that could influence this ruling.