Final answer:
A creditor loses the right to collect a debt if they do not file suit within the time allowed by the statute of limitations. The Lilly Ledbetter Fair Pay Act showed how statutes of limitations could affect discrimination cases, as it allows each discriminatory paycheck to restart the limitations period.
Step-by-step explanation:
The statement that a creditor who fails to file suit to collect a debt within the time prescribed by the appropriate statute of limitations loses the right to collect it is true. The statute of limitations is a law that sets the maximum time that parties have to initiate legal proceedings from the date of an alleged offense. If the lawsuit is filed after this time, the suit is typically barred, and the court will not enforce the debt. This principle of law serves the purpose of fairness and certainty: over time, evidence may become less reliable, memories fade, and it is generally considered unjust to allow individuals to sue after lengthy periods.
The Lilly Ledbetter Fair Pay Act is a relevant example of the statute of limitations in employment law. Before this Act, discriminatees like Ledbetter could not sue for pay discrimination if they discovered it after the statute of limitations had expired. Now, each discriminatory paycheck restarts the limitations period, allowing for a broader scope of legal recourse against ongoing discriminatory actions.