What is the Statute of Limitations on Debt?
Janet Schaaf is a freelance writer, editor and proofreader who considers reader advocacy to be her calling. After taking a few roads less traveled, Janet completed a bachelor’s degree in English Literature from the University of Missouri-Kansas City, with English Department Honors. She has been correcting grammar and checking facts since she could string a sentence together. For the past three years, Janet has focused on making personal finance topics understandable and relatable. Loan terms and credit card agreements can look overwhelming, but understanding what you’re agreeing to is paramount in grasping the impact debt can have on your life.
If you don’t repay your debts, your creditors may file lawsuits to collect. This could result in consequences such as wage garnishment. However, creditors don’t have forever to take legal action against you. Depending on your state laws and the types of debt, there is a limited window of time creditors can sue over borrowed money, in what’s known as the statute of limitations on debt.
What is the statute of limitations on debt?
The statute of limitations on collecting debt is the length of time creditors have to sue you for repayment. Typically, this amount of time runs from three to six years, though this can be longer depending on state laws and the type of debt.
The statute of limitations on debt collection begins either with your last missed payment or the date of your most recent payment, depending on where you live. Once the statute of limitations expires on your debt, your lender can’t seek legal action against you. This means they can’t seek methods such as wage garnishment to obtain repayment.
However, a lender or debt collection agency can still contact you regarding the owed money. The statute of limitations can also be reset depending on what actions you take.
What is time-barred debt?
Time-barred debt is another way of saying that the statute of limitation on debt collection has run out. This means that a debt collector can’t pursue or threaten to pursue legal action against you to collect old debt.
Statute of limitations on debt collection: Types of debt
The statute of limitations on debt is dependent in part on what type of debt you owe. There are three common types of debt that are affected by the statute of limitations:
- Written contracts: This is one of the most common types of debt. A written contract is when your agreement with a lender is promised in writing. It can include types of debt such as medical loans, personal loans and student loans. In some cases, it can even encompass credit card debt.
- Open-ended contracts: In some states, credit cards are set apart from written contracts and placed into the category of open-ended contracts. This means that your credit cards could have a different statute of limitation than your other types of debt.
- Oral agreements: If you agree to borrow money and pay it back but don’t get it in writing, this is classified as an oral agreement. Typically, the statute of limitations for oral agreements are shorter than those for written contracts.
Can a debt collector sue you after the statute of limitations ends?
While your lender can still contact you about an unpaid debt, after the statute of limitations on a debt runs out, a lender can no longer sue you to collect. However, keep in mind that the statute of limitations can be reset. This can happen if one of the following occurs:
- You make a partial payment.
- You acknowledge that you owe the money to debt collectors.
- You move to a state with different statutes of limitations on debt laws.
If this happens, the clock on your statute of limitations can reboot and you could be sued by debt collectors.
Should you pay a debt after the statute of limitations ends?
Before you decide to repay or not repay a time-barred debt, it’s a good idea to speak to a debt collection attorney first to guide you through the legal processes. Typically, you have three options from which to choose:
- Don’t pay the time-barred debt. Even though a debt collector can’t sue you for repayment, they can still contact you. Not paying your debts can also have a devastating impact on your credit score and make it difficult to borrow money in the future.
- Make a partial payment. If you pay off some of the debt, keep in mind that this could reset the statute of limitations on your debt. In this case, the debt collector could seek legal action against you.
- Completely repay the debt. Some lenders may be open to debt settlement. This is when you and your lender negotiate for you to pay a smaller sum than you originally borrowed to settle your account. If this is the case, be sure to get the agreement in writing and keep records.
Statute of limitations on debt collection by state
The state you live in will also play a large role in determining the statute of limitations on debt collection. The following is the length of time creditors have to sue you for written and oral contracts:
| State | Written contract (years) | Oral contract (years) |
|---|---|---|
| Alabama | 6 | 6 |
| Alaska | 3 | 3 |
| Arizona | 6 | 3 |
| Arkansas | 5 | 3 |
| California | 4 | 2 |
| Colorado | 3 | 3 |
| Connecticut | 6 | 3 |
| Delaware | 3 | 3 |
| District of Columbia | 3 | 3 |
| Florida | 5 | 4 |
| Georgia | 6 | 4 |
| Hawaii | 6 | 6 |
| Idaho | 5 | 4 |
| Illinois | 10 | 5 |
| Indiana | 10 | 6 |
| Iowa | 10 | 5 |
| Kansas | 5 | 3 |
| Kentucky | 10 (15 years for contracts on or before July 15, 2014) | 5 |
| Louisiana | 10 | 10 |
| Maine | 6 | 6 |
| Maryland | 3 | 3 |
| Massachusetts | 6 | 6 |
| Michigan | 6 | 6 |
| Minnesota | 6 | 6 |
| Mississippi | 3 | 3 |
| Missouri | 10 | 5 |
| Montana | 8 | 5 |
| Nebraska | 5 | 4 |
| Nevada | 6 | 4 |
| New Hampshire | 3 | 3 |
| New Jersey | 6 | 6 |
| New Mexico | 6 | 4 |
| New York | 6 | 6 |
| North Carolina | 3 | 3 |
| North Dakota | 6 | 6 |
| Ohio | 6 | 4 or 6 |
| Oklahoma | 5 | 3 |
| Oregon | 6 | 6 |
| Pennsylvania | 4 | 4 |
| Rhode Island | 10 | 10 |
| South Carolina | 3 | 3 |
| South Dakota | 6 | 6 |
| Tennessee | 6 | 6 |
| Texas | 4 | 4 |
| Utah | 6 | 4 |
| Vermont | 6 | 6 |
| Virginia | 5 | 3 |
| Washington | 6 | 3 |
| West Virginia | 10 | 5 |
| Wisconsin | 6 | 6 |
| Wyoming | 10 | 8 |
Source: Nolo
Frequently asked questions
Yes, in every state, there is a time limit on how long debt collectors can sue you over old debts. To find out if the statute of limitations on your debt has expired, check your credit reports to see the last payment you made on the debt. Then, check your state legislation on time-barred debts and consider legal counsel.
When the clock for the statute of limitations on debt begins depends on the state in which you live. In some states, it starts with the last missed payment. In other states, it can start with your most recent payment.
Depending on the state in which you live, your debt collector could restart the timer if you admit that you owe the debt or if you make any partial payments. It could also reset if you move to a state with different laws.