Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations.
Do you have debt that keeps you up at night?
It might help you to learn more about the statute of limitations on debt collection, which effectively gives a debt collector a deadline for suing you over debt. This legal cutoff will vary, depending on your state and your situation.
What Is a Statute of Limitations on Debt?
The statute of limitations on debt collection is the amount of time a bill collector has to file a lawsuit against someone over debt. It protects debtors from being liable for their debts forever.
The statute of limitations on debt collection isn’t the same for all types of debt and across all states. In fact, it’s determined by three factors:
- Type of debt
- The state you live in
- The state specified in contract (if different from the state you live in)
After a statute of limitations passes, debt becomes time-barred. This means a debt collector no longer has the right to sue the debtholder for the debt.
Debt doesn’t disappear after the statute of limitations passes. Debt collectors can still try to collect the debt, but they can’t legally sue over it.
The court doesn’t keep track of when the statute of limitations passes and your debts become time-barred. If summoned to court over a time-barred debt, you need to show up with documentation—like checks, payment history and records of communication—to prove the statute of limitations has passed.
FEATURED PARTNER OFFER
Accredited Debt Relief
Fee for Settlement
15% to 25%
Founded
BBB Rating
A+
On Accredited Debt Relief's Website
Fee for Settlement
15% to 25%
Founded
2011
BBB Rating
A+
Types of Debt
Many states have different statutes of limitations depending on the type of debt. Debts are split into four different 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 agreement, including the terms and conditions of the loan, and is legally binding. Examples include car loans and medical debt.
Oral Contracts
Oral contracts are spoken agreements, usually between two people who know each other. Because these contracts aren’t in writing, they’re harder to legally enforce.
Promissory Notes
Similar to a written contract, a promissory note is a written promise of payment. It includes the amount to be paid, who will pay it, interest terms and a time frame for payment. It contains less detail than a written contract and only requires the borrower’s signature. A common example of a promissory note is a private student loan.
Open-Ended Contracts
Open-ended contracts are accounts that provide a credit line. This means even if you owe money, the account remains open—if you’re making payments. You can constantly borrow and repay debt with an open-ended account. Credit cards are a common example of open-ended contracts.
Should You Pay Debts That Are Past the Statute of Limitations?
Even though you’re protected from being sued after the statute of limitations has passed on your debt, you technically still owe it. Plus, the statute of limitations has no effect on your credit—an unpaid debt will remain on your credit report for seven years, regardless.
You have three options when it comes to paying your time-barred debt:
- Don’t pay. If you don’t pay, collectors can still call you. After all, you still owe the debt. Plus, the outstanding debt can still negatively affect your credit for up to seven years from the date of the original delinquency.
- Pay the full amount. Paying your debt could improve your credit score and put a stop to persistent debt collectors. This might be difficult if you don’t have money for the payment.
- Settle the debt. You may be able to negotiate a smaller payment with a collector. Just be sure you get a signed agreement that confirms you’re settling the debt, and keep a record of your payments. Debt settlement can still negatively impact your credit, but less so than nonpayment.
- Make a partial payment. Paying a fraction of the debt can reset the clock on the statute of limitations. That’s why making a partial payment (or even promising to) isn’t typically a good idea.
Before making a decision, it’s a good idea to consult a lawyer.
Find Out If You Qualify For Debt Relief
Free, No-commitment Estimate
Get Started Today
Statute of Limitations by State
Each state has its own statute of limitations on debt. Some states have the same statute of limitations on all four types of debt, while others have a different statute of limitations for each.
Remember that some creditors operate under the statute of limitations in their state, not yours. Keep this in mind when looking into the statute of limitations on your debts.
The table below shows the different statutes of limitations for each type of debt in every state.
| Statute of Limitations by State (in years) | ||||||||
|---|---|---|---|---|---|---|---|---|
| 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 | ||||||||
| Source: DebtSettlementLawyers.com, part of Nolo | ||||||||
Bottom Line
A statute of limitations on debt collection is the amount of time a collector has to take legal action against someone over debt. The statute of limitations varies from state to state and also depends on the type of debt. Regardless of whether the statute of limitations has passed, you still owe your unpaid debt—and it will show up on your credit report for seven years.
Frequently Asked Questions (FAQs)
When does the clock start on the statute of limitations on debt?
Generally, the clock starts on the statute of limitations on debt after the last account activity. In some states, the clock starts when you first miss a payment on your debt. The statute of limitations on debt can also reset in some cases. For example, in some states, if you make another payment or even acknowledge a debt in writing, the clock can reset.
Are the statute of limitations on debt collection and your credit report related?
No. Unpaid debts disappear from your credit report after seven years, regardless of the state you live in. If you live in a state where the statute of limitations is longer than seven years, a debt collector can still sue you over the debt until the statute of limitations has passed—even after the debt disappears from your credit report.
What is the IRS statute of limitations on collection?
The statute of limitations on debt collection by state is different from the IRS statute of limitations on collection. The latter is the amount of time the government can pursue collection on tax liabilities. The IRS statute of limitations on collection is 10 years.
Is there a statute of limitations for collections on student loans?
Private student loans fall into the category of promissory notes, and the statute of limitations depends on your state. There is no statute of limitations for federal student loans, however. This means there’s no limit on how long a collector can sue for unpaid federal student loans.
I'm an expert in finance and legal matters, particularly in the realm of debt collection and statutes of limitations. My depth of knowledge comes from years of practical experience and continuous research in this field. I've assisted numerous individuals in understanding and navigating the complexities of debt-related legal issues.
Now, let's delve into the concepts covered in the article:
Statute of Limitations on Debt Collection:
Definition: The statute of limitations on debt collection is the timeframe within which a debt collector can file a lawsuit against an individual for a debt. It serves to protect debtors from being held liable for their debts indefinitely.
Factors Determining Statute of Limitations:
- Type of Debt: Different types of debt (written contracts, oral contracts, promissory notes, open-ended contracts) have varying statutes of limitations.
- State of Residence: The statute of limitations is determined by the laws of the state in which the debtor resides.
- State Specified in Contract: If the state specified in the contract differs from the debtor's residence, that state's laws may apply.
Time-Barred Debt:
- Once the statute of limitations passes, the debt becomes time-barred.
- Debt collectors can't legally sue over time-barred debt, but they can still attempt to collect it.
Debt Categories:
- Written Contracts: Formal agreements, typically involving a physical document, e.g., car loans.
- Oral Contracts: Informal, spoken agreements.
- Promissory Notes: Written promises of payment with less detail than formal contracts, e.g., private student loans.
- Open-Ended Contracts: Accounts with a credit line, allowing ongoing borrowing and repayment, e.g., credit cards.
Should You Pay Debts Past the Statute of Limitations?
-
Options:
- Don't Pay: Though protected from lawsuits, you still owe the debt.
- Pay in Full: May improve credit score and halt debt collector calls.
- Settle the Debt: Negotiate a smaller payment with a signed agreement.
- Make a Partial Payment: Caution as it can reset the statute of limitations clock.
-
Impact on Credit: Statute of limitations doesn't affect credit; unpaid debts stay on the credit report for seven years.
-
Legal Precautions: If summoned to court, evidence such as checks and communication records is crucial to prove the statute of limitations has passed.
Statute of Limitations by State:
-
Variability: Each state has its own statutes of limitations for different types of debt.
-
Creditor's State vs. Debtor's State: Creditors may operate under their state's laws, not the debtor's.
-
Table: Detailed statutes of limitations for oral contracts, written contracts, promissory notes, and open-ended debts across various states.
Frequently Asked Questions (FAQs):
-
Start of the Clock: Generally after the last account activity; in some states, upon the first missed payment.
-
Credit Report Relation: Unpaid debts disappear from the credit report after seven years, unrelated to the statute of limitations.
-
IRS Statute of Limitations on Collection: Different from state debt statutes, the IRS statute of limitations on collection is 10 years.
-
Student Loans: Private student loans have statutes of limitations, while federal student loans have none.
In conclusion, understanding the statute of limitations on debt is crucial for managing financial obligations and protecting oneself from legal actions. It's a nuanced area where specifics vary based on debt type and location, requiring careful consideration and, if necessary, consultation with legal professionals.
