Statute of Limitations on Debt Collection

Do you have debt that keeps you up at night? Learning about the statute of limitations on debt collection might help. This legal deadline limits the time a debt collector can sue you over debt. However, this timeframe varies depending on your state and situation.

What Is a Statute of Limitations on Debt?

The statute of limitations on debt collection defines the period during which a bill collector can file a lawsuit against you over unpaid debt. This legal boundary protects debtors from indefinite liability.

The statute of limitations is not uniform across all debt types and states. It is determined by:

Type of debt
The state you live in
The state specified in the contract (if different from your state)

Once the statute of limitations expires, the debt becomes time-barred. This means a debt collector loses the legal right to sue for the debt.

However, the debt itself doesn’t vanish. Collectors can still try to collect it, but they cannot sue you over it. You must prove the statute of limitations has passed if summoned to court over a time-barred debt. Documentation like payment history and communication records can support your case.

Types of Debt

The statute of limitations varies by debt type. Debts fall into four categories: written contracts, oral contracts, promissory notes, and open-ended contracts.

Written Contracts

A written contract is a physical document signed by both the borrower and the creditor. It outlines the loan’s terms and conditions and is legally binding. Examples include car loans and medical debt.

Oral Contracts

Oral contracts are spoken agreements, often between two acquaintances. Because these agreements aren’t in writing, they are harder to enforce legally.

Promissory Notes

A promissory note is a written promise to pay. It specifies the payment amount, payer, interest terms, and payment timeframe. It contains less detail than a written contract and requires only the borrower’s signature. Private student loans are a common example.

Open-Ended Contracts

Open-ended contracts provide a credit line. The account remains open as long as you make payments, allowing you to continually borrow and repay debt. Credit cards are typical examples.

Should You Pay Debts Past the Statute of Limitations?

Even after the statute of limitations expires, you technically still owe the debt. Moreover, the statute has no effect on your credit report, where unpaid debt can linger for seven years.

You have three options for handling time-barred debt:

Don’t pay. Collectors can still call, and the debt can impact your credit for up to seven years from the original delinquency date.
Pay the full amount. This could improve your credit score and stop collector calls but might be difficult if funds are tight.
Settle the debt. You might negotiate a smaller payment with a collector. Ensure you get a signed agreement confirming the settlement and keep payment records. While settlement can hurt your credit, it’s less damaging than nonpayment.
Make a partial payment. This can reset the statute of limitations, so it’s often not advisable.

Before deciding, consult a lawyer for guidance.

Statute of Limitations by State

Each state has its own statute of limitations on debt. Some states apply the same period to all debt types, while others vary the period by debt type. Additionally, creditors may operate under their state’s statute of limitations, not yours.

Here is a summary of the statute of limitations for each debt type by state:

State	Oral contracts	Written contracts	Promissory notes	Open-ended debts
Alabama	6	6	6	3
Alaska	6	6	3	3
Arizona	3	6	6	3
Arkansas	5	5	5	3
California	2	4	4	4
Colorado	6	6	6	3
Connecticut	3	6	6	3
Delaware	3	3	3	4
D.C.	3	3	3	3
Florida	4	5	5	4
Georgia	4	6	6	6
Hawaii	6	6	6	6
Idaho	4	5	5	4
Illinois	5	10	10	5
Indiana	6	10	10	6
Iowa	5	10	5	5
Kansas	3	6	5	3
Kentucky	5	15	15	5
Louisiana	10	10	10	3
Maine	6	6	6	6
Maryland	3	3**	6**	3
Massachusetts	6	6	6	6
Michigan	6	6	6	6
Minnesota	6	6	6	6
Missouri	5	10	10	5
Montana	3	8	8	5
Nebraska	4	5	5	4
Nevada	4	6	3	4
New Hampshire	3	3	6	3
New Jersey	6	6	6	3
New Mexico	4	6	6	4
New York	3	3	3	3
North Carolina	3	3*	5	3
North Dakota	6	6	6	6
Ohio	6	15	15	6
Oklahoma	3	5	5	3
Oregon	6	6	6	6
Pennsylvania	4	4	4	4
Rhode Island	10	5	6	4
South Carolina	3	3	3	3
South Dakota	6	6	6	6
Tennessee	6	6	6	3
Texas	4	4	4	4
Utah	4	6	6	4
Vermont	6	6	5	3
Virginia	3	5	6	3
Washington	3	6	6	3
West Virginia	5	10	6	5
Wisconsin	6	6	10	6
Wyoming	8	10	10	8

*10 years if the contract is under seal
**12 years if contract or promissory note is under seal

Bottom Line

Understanding the statute of limitations on debt collection by state is crucial. It determines how long a collector has to sue over unpaid debt, which varies by state and debt type. Even if the statute of limitations passes, you still owe the debt, and it can affect your credit for seven years. Stay informed and consider consulting a lawyer for personalized advice.

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