Statute of Limitations (SoL) on debt is the legal time limit that bars enforcement of the debt through the court system. It does not apply to all debts! Use the information on this page and website to learn about your state’s Statute of Limitations on debts and whether or not the rule applies to your situation.

If you believe you are a victim of unfair or illegal debt collection tactics, submit your information to a FREE* Fair Debt Lawyer by:

The debt collector may just be liable to you for statutory damages of up to $1,000, plus any actual damages suffered, plus attorney fees!

Note: The purpose of the information provided here and elsewhere on this site is to help educate people on some of their rights and a few of the laws and other rules that apply to many debt and credit issues, not to help people avoid paying valid debts. To the contrary, if you owe a debt and it’s valid and you have the financial means to pay the debt, then it is your duty to do so.

However at some point in time, and for a myriad of reasons, many of us encounter financial difficulties. When financial disaster strikes, we need help which is why we have laws such as the statute of limitations, bankruptcy and many other debt a credit protections laws. Use the information below to educate yourself on the Statute of Limitations but to also seek professional financial counseling before making any decisions that might effect your personal financial situation.

Although there are State and Federal Statute of Limitations on certain types of debts, this page concentrates on statute of limitations as defined by state laws and state civil collection codes!.

WARNING! Not all debt has a statute of limitations! Also, when the SoL expires, it can be used as a defense to bar collectors from collecting through the courts, however the debt DOES NOT go away! Collectors can still attempt to collect the debt using other legal dunning methods

For instance, there is NO statute of limitations on:

  • Federal Student Loans;
  • Most Types of Fines;
  • Past Due Child Support (state dependent); and
  • *Taxes (In many cases, income taxes have a 10-year SoL but this can be suspended as well as have more time added by filing the proper forms. Check with a local tax resolution expert about your particular situation.

The Statute of Limitations on debt depends on the type of debt and your State’s civil debt collection codes. Generally, unsecured debt expires 3 to 6 years after the last missed payment or the consumer’s last activity on the account. Written contracts such as car loans generally expire after 6 years. Judgments can last up to 20 years and can require the judgment be renewed at a certain point such as the 6-year point.

Generally, the statute of limitations for collecting debts begins the moment you sign a credit contract! However, just about every state has specific rules on the running of the statutory period and some even have provisions to adjust (toll) this period.

The term “toll” or “tolled” means to “stop the running of a statutory period for a certain period of time”. Many states use this term in their statutes of limitation rules and civil codes for debt collection.

For example, lets say that you live in Florida where the statute of limitations on credit card debt (open ended credit) is 4 years. You do not make any payments to your credit card company for two years leaving only 2 years to go before the statutory period is up. Suddenly, you decide to move to Georgia, stay 12 months and then move back to Florida.

Florida statutes say that leaving the state or making a voluntary payment tolls (stops) the running of the statutory period. So, on the day you move back to Florida, the remaining 2 year statutory period begins running again.

On the other hand, if you had two years left on the statutory period and suddenly decided to make payments for 12 months but then stopped again, the 4-year statutory period begins running again. In effect you’ve reset the clock.

In some cases, making an actual payment or making a verbal or written promise to pay can reset or restart the limitations depending on your state code.

WARNING! While the statute of limitations (SoL) is running or even after it’s expired, making ANY payment or signing a promissory note can reset or restart (depends on your state law) the statute of limitations. Always ensure the debt is valid, and then check your state laws to see if the debt has a statute of limitations BEFORE taking any other action such as making a payment or signing an agreement to make payments.

EXAMPLE: Let’s assume the SoL on a personal loan in your state is four years. On January 1, 2000, you sign the loan papers with the first payment due February 1, but you never make a payment. The SoL expires February 1, 2004. (Four years from the date of the last delinquent payment due date that a payment was missed).

Using the above example, let’s assume you receive a collection call in February 2003 (1 year before the SoL expires) and, based on that call, make a $50 payment with a promise to pay each month. That payment can either toll (stop) the collection time clock or reset it. If you fail to make another payment and your state allows the clock to be reset, then in this example, the clock restarts from the date of the next missed payment and runs another four years.

Credit cards and personal loans are good examples of “stopping the collection time clock” because each monthly payment restarts the clock. These payments are usually minimum payments and are normally for unsecured credit (although this has no effect on the SoL). Secured credit is usually not a collection issue because the creditor simply seizes (repossesses the item).

However, it’s worth mentioning that, in most cases items that are repossessed are often sold at auction for far below what is owed. The result is an unsecured debt that the debtor is still responsible for and expected to pay.

The statute of limitations for the collection of debts is not well known and is often misunderstood. Each state has its own specific rules. I highly encourage you to learn your state’s rules.

IMPORTANT! Many people believe the statute of limitations for credit reporting (7 to 10 years) is the same as the statute of limitations for enforcing debts! They are not the same! See credit reporting SoL

When collection agents call you demanding a payment on an old debt, making ANY payment, including a “token payment” can reset or restart the SoL clock and open the door for the collector to seek a judgment against you. Judgments are state-dependent but can run as long as 20 years and even be renewed in many states.

IMPORTANT: Although the statute of limitations has expired (the time allotted to legally enforce the debt in court) collectors can still attempt to collect expired debts (unless they were discharged in bankruptcy) and even take you to court to try and enforce the collection of debts. However, if you meet your state’s qualifying criteria and raise the “Expired Statute of Limitations” defense, the case is generally dismissed on the spot.

When the statute of limitations has expired, and you cannot pay the debt, consider sending collectors an “Expired SoL Letter” to inform them of your financial situation and that you are aware of the expired SoL defense and will use it as your defense if taken to court. Unless you inform the person trying to collect the debt that the statute of limitations has expired, or bring it up during a court appearance, the collector stands a good chance of winning a judgment against you.

Warning! As stated earlier, even though the statute of limitations has expired and you are unable to pay the debt, you can still be hauled into court. So, you must appear in court to raise the expired statute of limitations (SoL) defense. If you fail to appear in court, collectors stand an excellent chance of obtaining a default judgment.

Winning judgments gives collectors a long time to pursue you!!!

Quite often collectors convince debtors to make “token payments” and then they quietly seek a default judgment. Unfortunately, many debtors only learn of the judgment when their bank accounts are seized or their wages are garnished!

IMPORTANT NOTE: If you discover a default judgment against you and you were never notified of the court hearing, immediately contact the clerk of the court for copies of the court documents. Look over the documents carefully for any misinformation, missing or incorrect information. If you can show the court that you were not given due process, you stand a good chance of having the default judgment overturned.

What to do when debt collectors demand payment!

If you are not aware of the debt or are unsure if the debt is valid, DO NOT agree to anything until the collector has validated the debt in accordance with the FDCPA, and your state laws (if applicable) and you have verified the statute of limitations! See Statute of Limitations – by state and type of debt!


Statute of Limitations on Credit Reports

Do not confuse the statute of limitations for debt collection with the statute of limitations for credit reporting. See the rules in The Fair Credit Reporting Act (FCRA)!

For example, let’s say your State’s statute of limitations for collecting credit card debt is only four years. After fours years you can legally refuse to pay the debt however, according to the Fair Credit Reporting Act (FCRA) the debt can still be reported for seven (7) years from the date of your last missed payment date.

Some debt collectors hope that, because the debt is still on your credit report, you’ll think they can still collect! Again, before agreeing to anything verify the debt is valid and check the statute of limitations!

The federal FCRA limits the number of years credit reporting agencies or credit bureaus can report most types of debt to either 7 or 10 years. Some debts remain much longer such as tax liens which remain for 7 years AFTER being paid or indefinitely if not paid. Be advised that offering to pay less than the amount owed on a tax debt can extend the statute of limitations for reporting the debt.

Credit Reporting Time Clock

The Fair Credit Reporting Act clearly defines how long negative information can be reported!

IMPORTANT NOTE: New activity such as debt collection attempts or you making a payment does not restart the credit reporting time clock (except for taxes)!

Judgment Proof

Special Note: Judgment-proof is the commonly used term but a more accurate term would be “execution-proof”! Although creditors and debt collectors win lawsuits, they still have to collect thus, if you are penniless you are insulated not from judgment but from execution (collection of the debt – at least temporarily).

You may be considered “Judgment Proof” during periods of unemployment, while drawing disability pay or disability retired pay or if you have no assets such as home, car, land, and other big-ticket items. In other words, you have no money and no income and can prove it!

Never ignore a lawsuit just because you are broke or have no assets! If a debt collector or creditor is trying to sue and you believe that you are judgment proof, you must respond to the lawsuit as such. Failure to appear and show the judge why you are judgment proof opens the door for the judge to grant the collector a “default judgment”. Even though they cannot collect anything from you now, they can wait many years and try again. Also, the judgment show up on your credit report and costs you many points on your credit score!

If you lose your “judgment proof” status because of a change in your financial status, creditors or collectors can seek a judgment and, if successful, also seek wage garnishment of up to 25% of your disposable income.

Once you’re employed again or your financial situation improves, it’s better to negotiate a reduced payoff rather than risk a court-ordered judgment. The difference is your credit report will show “debt settled” instead of the more negative “judgment”!

See our in-depth explanations of fair debt act (FDCPA)

Comments

  1. says

    Defendant signed the promissory on April 27,2007 promise to monthly payment of $ 4000,from June 1,2007 till May 30,2009 when capital of $ 227,000 was due .Defendant fail to make any payment or pay the capital when due on June 1,2009 .I sued the defendant in August 2013 since there was no acceleration clause for the capital $ 227,000 plus monthly payments total of $ 960,000 plus interest .Please let me know if I am within statute of limitation since there is no acceleration clause ,defendant Attorney claim that I am out of statute of limitation . I need your legal advise .
    sherwani

    • says

      We can’t help it that debt collectors educate themselves at out site. And its a free country where anyone can ask a question. But our time answering questions? That, my good sir, is reserved for consumers only!

  2. christopher says

    my ex and I are jointly on an account that went delinquent 11-12-2008. This was a revolving line of credit with collateral(boat.) The boat was repo and sold at auction. The auction house paid the bank 7200 on 3/10/2009. The SOL is 6 years in Washington. Does the SOL stay at the delinquency date, our last payment or does it reset to when the auction paid the last payment? I am trying to send a Zombie Debt letter and want to make sure the SOL is past. Thanks, great site

    • says

      The correct answer to your question depends on several factors, but in all likelihood the date of default was 180-270 days after your last payment. You should let us have a look at the paperwork you have been sent, it may violate the FDCPA. Washington Debt Help Lawyers can review your situation at no cost, and you may be entitled to damages.

  3. Billy Bob says

    I borrow money against a truck in 2001 from a private person an signed a contract to be paid in six years. I fell on hard times an failed to make payments an now it has been 14 years for said loan an 7-8 years since I made last payment. The title has a lien on it but the loaner has yet to repo the vehicle. Do I still owe the balance legally? And if not how can I go about obtaining a clear title in my name with no lien? Thanks you

    • says

      The Statute of Limitations on debt is a rule that sets a time limit within which a creditor may sue you for payment of a debt. The length of time varies from state to state. If a debt collector threatens to sue you over a debt that is beyond the state statute of limitations, they are in violation of the Fair Debt Collection Practices Act. When a statute of limitation expires, it does not mean that the debt goes away, it only means you can use it as a defense to stop collectors from collecting thru the court system. Collectors can still try to collect thru other methods. Under the right circumstances the debt statute of limitations can be renewed for just about any type of debt. If you are being contacted by a debt collector and think your fair debt rights are being violated, Fair Debt Case Review or call toll free 888-595-9111 to request a free case review.

  4. Pierre Nabizwa says

    Hi. I had a credit card when I was living in Michigan -1998 to 2007. I lost my job and moved out of Michigan on January 15, 2008 to Maryland. While in Maryland, I lived at a relative’s home for a year and finally moved out of the country for a job. I just returned and opened an account only for it to be garnished by a collection agency. When I reviewed the court papers, they stated that they served me with the notice for hearing on 8/8/2009 at my old address. This obviously was a lie because I was not even in the state or the country on the said date. My questions are: (I) Does moving out of the state of Michigan toll the statute of limitation? (II) Since I was then residing in Maryland at the date of the hearing, should the case not have been in Maryland? (III) Does a fraudulently obtained order – based on the false testimony of service, toll the statute of limitation? (IV) Can I assert statute of limitation if the case is set aside?

    • says

      A debt collector with a right to garnish (for example, arising from a judgment) can seize any non-exempt funds from your bank, and garnish up to 25% of your disposable income from your paycheck. However, the story you tell does not pass the “smell test” as either you didn’t get a fair chance to respond to the lawsuit or there was a likely improper service to begin with. You likely have experienced some sort of Fair Debt violation(s), and even if not, it sounds like you would benefit from re-prioritizing your debts through debt settlement, and the Debt Help Lawyers at this site can provide you a free, no obligation Fair Debt consultation. The worst thing to do is nothing, so call us now at 888-595-9111 and we will get started figuring our how to help you!

  5. dina says

    hi,i live in wisconsin and i got truancy fines for my daughter back in 2000 and now they took my income taxes to pay them.is there any stature of limitations on them

    • says

      Government debts typically have very long or in many cases no limitation period. If they are collecting through a third party debt collector, give us a call. It’s not uncommon to find errors in their practices 888-595-9111.

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