The statute of limitations on debt
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The statute of limitations is the amount of time, stated by law, after which legal proceedings cannot be initiated. In the case of debt, the statute of limitations is the limit to the time in which lawsuits can be brought against you to settle old debts. The statute of limitations on debt is designed to protect consumers from legal action on old debts. 

Once the statute of limitations has expired, the debt is considered time-barred. A collector cannot bring lawsuits against you. 

☝️ This doesn’t mean the debt is expunged from your record. You are still liable for the debt, you just can’t be sued.

Credit bureaus are not governed by the statute of limitations. The debt can remain on your credit record for 7 years from the date when the debt first went into arrears and was not subsequently brought up to date.

The statute of limitations on debt varies by state, with the average time ranging from three to six years. Here is what you need to know.

Why the Statute of Limitations on Debt Is Important

If you have not paid a debt, creditors have the right to sue you for repayment. For this reason, debtors should also be careful to collect on debt before the statute of limitations comes into effect.

Even though you can no longer be sued for debt after the statute of limitations has expired, some creditors or collectors may sue anyway. 

If you don’t respond, a judgment may still be entered against you. If you do not appear in court, the court may rule in the creditor’s favor, even if the statute of limitations has expired.

You need to appear in court and claim the statute of limitations as a defense. That’s why it is important to understand the statute of limitations in your state and to know how to use it to protect yourself.

In today’s world, you cannot be sent to jail for failure to pay consumer debt. Despite this, some people are still finding themselves facing – and even serving – jail time for unpaid debts.
Find out how it happens and how you can avoid it: Can You Go To Jail For Debt?

📰 New Federal debt collection regulations will take effect on Nov. 29, 2021. The new rules will have a far-reaching impact on the debt collection industry. If you have delinquent debts or accounts in collection these rules will affect you.
Learn more about Regulation F and what will it mean for consumers with debts.

How the Statute of Limitations is Calculated on Debt

The statute of limitations is calculated from your last activity on a debt account or contract. That means that it can be counted from the moment the contract is finalized, or from your last payment. Most often, the clock on the statute of limitations starts from the first missed payment, or when the missed payment is reported after 30 days.

Even after the statute of limitations has passed, the debt is not cleared. Creditors can continue to contact you and try to collect or ask you to pay. You can request that the collector stop contacting you and they will have to comply. 

💡 Because of the ambiguity around the type of debt, state of collection, and start point for the statute of limitations, it’s important to get legal advice about your situation if you have old debt and are unsure about your situation. 

In some states, resuming payments on old debt or even acknowledging that you owe it is enough to reset the statute of limitations. Even if the original statute of limitations has passed you could be liable for the debt and a new statute of limitations activated. 

Actions That Reset the Statute of Limitations

The statute of limitations is reset on debt for a variety of reasons, including something as simple as acknowledging that you owe the debt. Here are ways the statute of limitations could be reset on your debt:

  • A payment of any amount.
  • Accepting a settlement offer.
  • Responding to collectors and acknowledging your debt.
  • Any recognition of the debt owed.
  • Agreeing to a payment plan.
  • Stating that you will pay off some of the debt.
  • Making any changes to the debt account, including linked bank accounts or name changes.

Based on this list, it is clear that if you believe that the statute of limitations on your debt may have expired, it is better not to do anything until speaking to a lawyer or trusted legal advisor on the best plan of action. Even actions that appear to demonstrate goodwill, such as entering a payment plan or paying off part of the debt, can open you up to new lawsuits from the creditor.

💡 If you can’t afford a lawyer, look into how to get free legal help.

The Statute of Limitations on Debt in Every State

Below you will find a list of the current statute of limitations for different types of debt in all 50 states.

Written debt refers to an installment loan, while open-ended debt includes credit cards and other revolving lines of credit. Oral debt is less common but refers to agreements spoken but not written down.

👉 Note that if the statute of limitations is three years, in most cases that means that if your first missed payment was on August 15, 2018, the statute of limitations expires on August 15, 2021.

Here’s what the statute of limitation on debt is in each of the 50 states:

State Open-ended Written Oral
Alabama3 years6 years6 years
Alaska3 years6 years6 years
Arizona3 years5 years3 years
Arkansas3 years6 years3 years
California4 years4 years2 years
Colorado6 years6 years6 years
Connecticut3 years6 years3 years
Delaware4 years3 years3 years
Florida 4 years5 years4 years
Georgia6 years6 years4 years
Hawaii6 years6 years6 years
Idaho5 years5 years4 years
Illinois5 years10 years5 years
Indiana6 years10 years6 years
Iowa5 years10 years5 years
Kansas3 years5 years3 years
Kentucky5 years10 years5 years
Louisiana3 years10 years10 years
Maine6 years6 years6 years
Maryland3 years3 years3 years
Massachusetts6 years6 years6 years
Michigan6 years6 years6 years
Minnesota6 years6 years6 years
Mississippi3 years3 years3 years
Missouri5 years10 years5 years
Montana5 years8 years5 years
Nebraska4 years5 years4 years
Nevada4 years6 years4 years
New Hampshire3 years3 years3 years
New Jersey6 years6 years6 years
New Mexico4 years6 years4 years
New York6 years6 years6 years
North Carolina3 years3 years3 years
North Dakota6 years6 years6 years
Ohio6 years15 years15 years
Oklahoma3 years5 years3 years
Oregon6 years6 years6 years
Pennsylvania4 years4 years4 years
Rhode Island10 years10 years10 years
South Carolina3 years3 years3 years
South Dakota6 years6 years3 years
Tennessee6 years6 years6 years
Texas4 years4 years4 years
Utah4 years6 years4 years
Vermont3 years6 years6 years
Virginia3 years5 years3 years
Washington3 years6 years3 years
West Virginia5 years10 years5 years
Wisconsin6 years6 years6 years
Wyoming8 years10 years8 years

This table makes it clear that the statute of limitations on your debt is influenced by not only the state you reside in, but also by the type of debt. It can vary from 3 years to 15 years. In Ohio, for example, the statute of limitations on open-ended credit card debt is only six years, while for written or oral debt it is 15 years. 

⚠️ Some creditors may take the statute of limitation from the state of their main office or headquarters, which may not be the state in which you reside. Be sure to read the fine print of your debt contract to understand the laws that apply to your debt. 

Your Credit Score and the Statute of Limitations on Debt

The statute of limitations is not the same as the credit reporting time. Even after the statute of limitations has passed, unpaid debt can stay on your credit reports from all three credit bureaus.

The usual period for late payments and unpaid debt to be reported is seven years, but this can vary in certain situations. If you think your debt should no longer be reported but still appears on your credit report, you can contact the credit bureau and request a correction

How to Tell If Your Debt is Time-Barred

Once the statute of limitations has expired, the debt is called time-barred debt. Creditors are barred from legal action because too much time has passed. 

To find out if your debt is time-barred you have three options:

  • The Attorney General’s office can provide free legal information.
  • A local legal aid can also provide information and answer questions regarding your specific debt situation.
  • An attorney, although more expensive, can give you quick, personalized advice when needed.

All of these options are available to you whether or not the debt is time-barred. Although the Attorney General’s office or a local legal aid may be difficult to contact, they are inexpensive or free options open to anyone. 

Keep in mind that just because the debt is time-barred does not mean it is cleared from your name. It can remain on your credit record. You still owe the debt. Time-barred debt just means you cannot be sued for it. 

Information to Get From the Collector

In addition to legal advice, you have the right to ask certain questions of the debt collector. You can ask them if the debt is time-barred and the date of the last payment. While they can choose not to answer whether the debt is time-barred, they are required to disclose the date of the last payment either verbally or in writing. 

💡 If you ask them if the debt is time-barred and they fail to answer, look into it yourself. There’s a good chance that the statute of limitations has expired.

A debt collector is required to send you a letter within five days of their first contact with you. The letter must include the date of last payment, the amount owed, the original creditor, and the name of the collector. 

In addition, you have the right to ask the debt collector to only contact you within certain hours or at home. You can send a registered letter to the debt collection company requesting them to stop contact.  

If you have multiple debts and you want to prioritize your payments, you may wish to put debts that have passed the statute of limitations or are close to passing it at the bottom of your list, even if you intend to pay them.

Do you have any questions about the statute of limitations on debt? Let us know in the comments below!