Statute of Limitations on Old Unpaid Debt – Court Judgements, Credit Card Collections

Statute of Limitations on Old Unpaid Debt – Court Judgements, Credit Card Collections
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If you have debt that has gone to a collection agency, it’s important to understand the statute of limitations in your state. The statute of limitations (SOL) is a strict rule that sets a time limit for creditors to sue for debt payment. If the statute of limitations on your debt has run out, collection agencies can still contact you and ask you to pay, but they no longer have the right to sue.

The statute of limitations varies by state; in some states it’s just four years while other states give creditors up to ten years to sue. The statute of limitations can vary depending on whether your agreement with the creditor is oral or in writing, whether you have a special type of debt, and sometimes even whether or not you make a partial payment on the debt.

Here’s what you need to know about the statute of limitations on debt collection and the statute in your state.

Why the Statute of Limitations Matters

Think the statute of limitations isn’t important? Every day, consumers make payments on charged-off accounts they do not need to pay because the statute has already run out. Understanding the statute on your debt can also help you get rid of old debts because you know that creditors cannot file a lawsuit against you.

While the statute of limitations won’t make the debt vanish when the time limit expires, it gives you an absolute defense if the creditor or debt collector tries to file a lawsuit. In this case, you can submit evidence to the court that the statute of limitations expired and the case against you will be dismissed without a judgment.

What is the Statute of Limitations on My Debt?

Below are the statute of limitations for all 50 states as well as additional information that relates to debt collection. Note that some states, such as Ohio, classify credit card contracts as written agreements, some states consider them oral agreements.

Alabama

(Ala. Code § 6-2-30 et seq.)

6 years for written agreements; 6 years for oral agreements

Alaska

(Alaska Stat. § 09.10.010 et seq.)
3 years for written agreements; 3 years for oral agreements

Arizona

(Ariz. Rev. Stat. Ann. § 12-541 et seq.)
6 years for written agreements; 3 years for oral agreements

Arkansas

(Ark. Code Ann. § 16-56-101 et seq.)
5 years for written agreements; 3 years for oral agreements

The statute of limitations on medical debts is just 2 years from the date services were performed, but partial payment will reset the SOL.

California

(Cal. Civ. Proc. Code § 312 et seq.)
4 years for written agreements; 2 years for oral agreements

The SOL is only reset for payments made after the original SOL expires. This means a payment made 2 years after the time limit began will not reset the clock, but the time limit will be reset for payments made after 4 years.

Colorado

(Colo. Rev. Stat. § 13-80-101 et seq.)
3 years for written agreements; 3 years for oral agreements (6 years for short-term oral debt agreements)

Connecticut

(Conn. Gen. Stat. Ann. § 52-575 et seq.)
6 years for written agreements; 3 years for oral agreements

Delaware

(Del. Code Ann. tit. 10, § 8101 et seq.)
3 years for written agreements; 3 years for oral agreements

District of Columbia

(D.C. Code § 12-301 et seq.)
3 years for written agreements; 3 years for oral agreements

Open accounts are considered written agreements and the statute starts on the date of the last payment or charge on the credit card. An oral promise to pay resets the SOL.

Florida

(Fla. Stat. Ann. § 95.011 et seq.)
5 years for written agreements; 4 years for oral agreements

Written contracts are tolled for any amount of time in which the debtor is not in the state and whenever a voluntary payment is made.

Georgia

(Ga. Code Ann. § 9-3-20 et seq.)
6 years for written agreements; 4 years for oral agreements

Hawaii

(Haw. Rev. Stat. § 657-1 et seq.)
6 years for written agreements; 6 years for oral agreements

The SOL is tolled for any amount of time the debtor is not in the state.

Idaho

(Idaho Code § 5-201 et seq.)
5 years for written agreements; 4 years for oral agreements

Illinois

(735 Ill. Comp. Stat. 5/13-201 et seq.)
10 years for written agreements; 5 years for oral agreements

Absence from the state results in toll from the SOL.

Indiana

(Ind. Code Ann. § 34-11-2-1 et seq.)
10 years for written agreements; 6 years for oral agreements

The SOL will be reset when there is a promise to pay or written acknowledgement or voluntary payment.

Iowa

(Iowa Code Ann. § 614.1 et seq.)
10 years for written agreements; 5 years for oral agreements

Kansas

(Kan. Stat. Ann. § 60-501 et seq.)
5 years for written agreements; 3 years for oral agreements

Kentucky

(Ky. Rev. Stat. Ann. § 413.080 et seq.)
10 years for written agreements (or 15 for contacts before 7/15/2014); 5 years for oral agreements

Louisiana

(La. civil code § 3492 et seq.)
10 years for written agreements; 10 years for oral agreements

Maine

(Me. Rev. Stat. Ann. tit. 14, § 751 et seq.)
6 years for written agreements; 6 years for oral agreements

Maryland

(Md. Courts & Jud. Proc. Code Ann. § 5-101 et seq.)
3 years for written agreements; 3 years for oral agreements

The SOL can be reset by voluntary payment or written or oral acknowledgement.

Massachusetts

(Mass. Ann. Laws ch. 260, § 1 et seq.)
6 years for written agreements; 6 years for oral agreements

Michigan

(Mich. Comp. Laws § 600.5801 et seq.)
6 years for written agreements; 6 years for oral agreements

Minnesota

(Minn. Stat. Ann. § 541.01 et seq.)
6 years for written agreements; 6 years for oral agreements

Mississippi

(Miss. Code. Ann. § 15-1-1 et seq)
6 years for written agreements; 3 years for oral agreements

Mississippi law prohibits any collection efforts on time-barred debt. No collection activity of any kind is allowed.

Missouri

(Mo. Rev. Stat. § 516.097 et seq.)
10 years for written agreements; 5 years for oral agreements

Montana

(Mont. Code Ann. § 27-2-202 et seq.)
8 years for written agreements; 5 years for oral agreements

SOL can be reset with a payment or written acknowledgement of the debt.

Nebraska

(Neb. Rev. Stat. § 25-201 et seq.)
5 years for written agreements; 4 years for oral agreements

SOL is reset with a partial payment or written acknowledgement.

Nevada

(Nev. Rev. Stat. Ann. § 11.010 et seq.)
6 years for written agreements; 4 years for oral agreements

New Hampshire

(N.H. Rev. Stat. Ann. § 508:1 et seq.)
3 years for written agreements; 3 years for oral agreements

New Jersey

(N.J. Stat. Ann. § 2a:14-1 et seq.)
6 years for written agreements; 6 years for oral agreements

New Mexico

(N.M. Stat. Ann. § 37-1-1 et seq.)
6 years for written agreements; 4 years for oral agreements

Payment or acknowledgement of debt resets the SOL.

Debt collectors must provide specific information to consumers when communicating about a time-barred debt.

New York

(N.Y. Civ. Prac. Laws & Rules § 201 et seq.)
6 years for written agreements; 6 years for oral agreements

In New York City, debt collectors must provide consumers with information about their rights regarding time-barred debts in all communications.

North Carolina

(N.C. Gen. Stat. § 1-46 et seq.)
3 years for written agreements; 3 years for oral agreements

North Carolina bars any collection activity on time-barred accounts owned by a debt buyer or collection agency. Collection agencies are required to make specific disclosures about time-barred accounts before collecting payments on the accounts. The SOL will be reset on an open account if a payment is made.

North Dakota

(N.D. Cent. Code § 28-01-01 et seq.)
6 years for written agreements; 6 years for oral agreements

SOL is reset with a promise to pay, written acknowledgement of debt, or payment.

Ohio

(Ohio Rev. Code Ann. § 2305.03 et seq.)
8 years for written agreements; 6 years for oral agreements

Oklahoma

(Okla. Stat. Ann. tit. 12, § 91 et seq.)
5 years for written agreements; 3 years for oral agreements

Oregon

(Or. Rev. Stat. § 12.010 et seq.)
6 years for written agreements; 6 years for oral agreements

Pennsylvania

(42 Pa. Cons. Stat. Ann. § 5501 et seq.)
4 years for written agreements; 4 years for oral agreements

Rhode Island

(R. I. Gen. Laws § 9-1-12 et seq.)
10 years for written agreements; 10 years for oral agreements

South Carolina

(S.C. Code Ann. § 15-3-510 et seq.)
3 years for written agreements; 3 years for oral agreements

Written acknowledgement or partial payment tolls the SOL.

South Dakota

(S.D. Codified Laws Ann. § 15-2-1 et seq.)
6 years for written agreements; 6 years for oral agreements

Tennessee

(Tenn. Code Ann. § 28-3-101 et seq.)
6 years for written agreements; 6 years for oral agreements

Texas

(Tex. Civ. Prac. & Rem. Code § 16.001 et seq., Tex. Bus. & Com. Code Ann. § 2.725)
4 years for written agreements; 4 years for oral agreements

Utah

(Utah Code Ann. § 78B-2-101 et seq.)
6 years for written agreements; 4 years for oral agreements

SOL is reset with a written acknowledgement of the debt.

Vermont

(Vt. Stat. Ann. tit. 12, § 461 et seq.)
6 years for written agreements; 6 years for oral agreements

Virginia

(Va. Code Ann. § 8.01-228 et seq.)
5 years for written agreements; 3 years for oral agreements

Washington

(Wash. Rev. Code Ann. § 4.16.005 et seq.)
6 years for written agreements; 3 years for oral agreements

West Virginia

(W. Va. Code § 55-2-1 et seq.)
10 years for written agreements; 5 years for oral agreements

SOL is reset with acknowledgement of debt with a promise to pay or partial payment.

Wisconsin

(Wis. Stat. Ann. § 893.01 et seq.)
6 years for written agreements; 6 years for oral agreements

Wisconsin bars all collection activities on time-barred accounts. The SOL is tolled with a partial payment and begins again with the last payment.

Wyoming

(Wyo. Stat. § 1-3-102 et seq.)
10 years for written agreements; 8 years for oral agreements

When Does the Statute of Limitations Begin?

When the statute of limitations begins on your debt depends on your agreement. It may start with the first missed payment on the account or it may begin when the creditor sent you a demand letter for the full amount.

The statute of limitations starts when there is a cause of action, or when you do something contrary to the terms of the agreement for which you can be sued in court. This is usually failing to pay the bill. When the payment is not made on time, the terms of the agreement are violated.

Some agreements include an acceleration clause. This needs to be invoked before the creditor has a cause of action. It can include sending a demand letter for full payment by a deadline. In this case, failing to pay after the demand letter has been sent will start the statute of limitations.

Do Not Restart the Statute of Limitations!

It is possible to stall or even revive the statute of limitations if you aren’t careful. In some states, making a partial payment on a debt can postpone the statute of limitations from taking effect on the account. In most states, the statute of limitations begins the day you made the last payment to the account. If you make a partial payment after three years once the account has gone into collections, the SOL may restart.

A handful of states have laws that specifically state that a partial payment will not restart the clock on the statute of limitations as long as you do not sign a new written promise to pay or a new agreement with your creditor or collection agency.

It’s also possible to revive the time period after the statute of limitations has expired. If a creditor contacts you about an old debt on which the SOL has expired, be careful about what you say. If you acknowledge the validity of the debt (either by agreeing you owe the debt even though the statute has expired or signing an agreement), you may revive or extend the statute of limitations.

Can a Debt Collector Still Collect After the Limit Expires?

In most states, debt collectors and creditors can still try to collect on the debt, even after the statute of limitations expires. While they cannot successfully sue you, they can even choose to sue you in court for the debt, even if they know the SOL has expired. In fact, this is a common tactic by debt collectors as many consumers will not be aware of the statute of limitations and not file proof of their absolute defense. If you are sued by a creditor for a debt past the statute of limitations and you do not appear in court or submit proof of your defense against the lawsuit, the creditor can still get a judgment against you.

Keep in mind you have the right to tell debt collectors not to contact you again and they must stop contacting you. You can put your request in writing to have proof the request was sent. Once your request is received, the debt collector should not contact you against except to confirm receipt of the request or notify you of legal action against you.

In some states, even attempting debt collection on a time-barred debt is illegal. In these cases, creditors cannot even contact you to demand payment, let alone sue you for a debt on which the SOL has expired.

Will the Debt Still Appear on My Credit Report When the SOL Expires?

The statute of limitations and the amount of time negative information appears on your credit report are separate. According to the Fair Credit Reporting Act, negative information reported to a credit bureau can remain on your credit file for 7 years, in most cases, although the statute of limitations may be only 4-6 years.

This is why it may make sense in some cases to pay a debt, even if the statute of limitations has expired. Understanding the statute of limitations gives you negotiating power with the creditor, however, as they are barred from suing you. You may be able to negotiate for a dramatically reduced payoff amount in exchange for having the negative information removed from your credit report.




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