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What Is the Statute of Limitations on Debt?
By Quinlan Grim MONEY RESEARCH COLLECTIVE
If you’re being pursued by debt collectors, it’s important to understand your rights. A creditor might not be able to take legal action if the statute of limitations on your debt has passed. An expired statute of limitations means you still owe, but your debt collectors don’t have the legal right to sue you.
The statute of limitations for collections varies depending on the type of debt, your location and your situation. This guide will explain the statute of limitations for debts and what it might mean for you.
Statute of limitation on debt collection by state:
| State | Written contract | Oral contract | Open-ended accounts | Promissory note |
| Alabama | 6 | 6 | 3 | 6 |
| Alaska | 3 | 3 | 3 | 3 |
| Arizona | 6 | 3 | 3 | 6 |
| Arkansas | 5 | 3 | 5 | 5 |
| California | 4 | 2 | 4 | 4 |
| Colorado | 3 | 3 | 3 | 3 |
| Connecticut | 6 | 3 | 3 | 6 |
| Delaware | 3 | 3 | 3 | 3 |
| DC | 3 | 3 | 3 | 3 |
| Florida | 5 | 5 | 4 | 4 |
| Georgia | 6 | 4 | 4 | 4 |
| Hawaii | 6 | 6 | 6 | 6 |
| Idaho | 5 | 4 | 4 | 5 |
| Illinois | 10 | 5 | 5 | 10 |
| Indiana | 6 | 6 | 6 | 6 |
| Iowa | 10 | 5 | 5 | 10 |
| Kansas | 5 | 3 | 5 | 5 |
| Kentucky | 15 | 5 | 5 | 10 |
| Louisiana | 10 | 10 | 3 | 10 |
| Maine | 6 | 6 | 6 | 20 |
| Maryland | 3 | 3 | 3 | 3 |
| Massachusetts | 6 | 6 | 6 | 6 |
| Michigan | 6 | 6 | 6 | 6 |
| Minnesota | 6 | 6 | 6 | 6 |
| Mississippi | 3 | 3 | 3 | 3 |
| Missouri | 10 | 6 | 5 | 3 |
| Montana | 8 | 5 | 5 | 5 |
| Nebraska | 5 | 4 | 4 | 5 |
| Nevada | 6 | 4 | 4 | 3 |
| New Hampshire | 3 | 3 | 3 | 6 |
| New Jersey | 6 | 6 | 6 | 6 |
| New Mexico | 6 | 4 | 4 | 4 |
| New York | 6 | 6 | 6 | 6 |
| North Carolina | 3 | 3 | 3 | 3 |
| North Dakota | 6 | 6 | 6 | 6 |
| Ohio | 8 | 6 | 6 | 6 |
| Oklahoma | 5 | 3 | 5 | 6 |
| Oregon | 6 | 6 | 6 | 6 |
| Pennsylvania | 4 | 4 | 4 | 4 |
| Rhode Island | 10 | 10 | 10 | 10 |
| South Carolina | 3 | 3 | 3 | 3 |
| South Dakota | 6 | 6 | 6 | 6 |
| Tennessee | 6 | 6 | 6 | 6 |
| Texas | 4 | 4 | 4 | 4 |
| Utah | 6 | 4 | 4 | 4 |
| Vermont | 6 | 6 | 6 | 14 |
| Virginia | 5 | 3 | 3 | 6 |
| Washington | 6 | 3 | 6 | 6 |
| West Virginia | 10 | 5 | 5 | 6 |
| Wisconsin | 6 | 6 | 6 | 10 |
| Wyoming | 10 | 8 | 6 | 10 |
What is a time-barred debt?
A time-barred debt is any overdue payment that has passed the statute of limitations in your state. Whether it’s credit card debt, medical debt or unpaid auto loans, if enough time has passed since your first missed payment, debt collectors can’t sue you for what you owe.
To be clear, you still owe a time-barred debt. The statute of limitations only applies to legal action, so your time-barred debt can still collect interest and affect your credit score. You must pay your debts in full to keep your finances on track. However, if your debt is considered time-barred, debt collectors legally can’t sue, levy your accounts or seize your assets.
It’s important to know the time limit on debt collection so you understand your rights. A debt collector may threaten to take you to court over unpaid loans, but those threats are empty once the statute of limitations expires.
What does the statute of limitations period mean for debt?
The statute of limitations on debt collection is a set period in which a creditor can legally file a lawsuit against a lender. If the statute of limitations on your student loans or other debts expires, you will still have to pay your debt, but you can’t be prosecuted.
Most legal actions come with a statute of limitations. For example, in California, you can’t be charged with a misdemeanor like theft if it’s been more than a year since you committed the crime. Debt collection laws exist to protect people in debt from experiencing legal repercussions throughout their lives.
Before we break down the different factors that determine a statute of limitations, you should understand that a statute of limitations on debt is not:
- A time frame for repayment: The statute of limitations is not based on the repayment schedule in your loan contract. You must pay back your loan within the established time frame, regardless of the statute of limitations in your state.
- A time limit on debt: Your debt doesn’t go away once the statute of limitations has passed. You will still owe your creditors, and debt collectors can still pursue you through phone calls, letters and emails.
- A law against being sued: If you owe a debt and don’t repay it, you can be sued. The statute of limitations on your debt only means you can’t be sued after a specified period, which could be as long as 10 years in some states.
The statute of limitations on debt is determined by state law, not private creditors. It doesn’t affect the amount you owe or the terms of your loan, but the statute of limitations can protect you against the following:
- Lawsuits: Debt collectors can’t initiate a lawsuit after the statute of limitations expires. If you are sued before the statute expires, the case is valid and you’re still obligated to pay.
- Bank levies and seizures: Bank levies are legal actions a creditor or collection agency can take if you have delinquent debt. The creditor has to petition a court for a legal judgment on the money owed before they levy it from your account. This can’t happen if the statute of limitations on your debt has passed.
How long is a debt collectible? That depends on a few factors such as where you live and what type of debt you owe.
State laws
Every state has its own statute of limitations for each type of debt. As you can see in the table above, a standard statute of limitations in most states is between three and six years.
In New York, for example, the bill collection statute of limitations for all types of debt is six years. That means your debt is considered time-barred if your first missed payment was over six years ago.
The point at which a statute of limitations begins can also vary by state. In some states, it begins with your first missed payment. In other states, it starts with your most recent payment. For example, if you miss a payment in February, the statute of limitations begins on the date of your January payment. This also applies if your last payment was made in collections.
Types of debt
There are four main types of debt: written contracts, oral contracts, open-ended accounts and promissory notes. Each type has its own statute of limitations on collections.
If you aren’t sure which types of debt you have, you might want to consult an attorney. The type of debt depends on the contract or agreement made with your lender and could be unclear if you don’t have a copy of the contract on hand.
Written
Written contracts are physical documents signed by the lender and the borrower. These contracts outline the terms of the loan, which include the APR, repayment period and potential penalties.
Written contract debt is the most common type of debt and the easiest to enforce legally. The contract serves as proof of your obligations to the creditor. Auto loans, home loans and other official agreements require a written contract to protect both you and the lender.
Oral
An oral contract is a verbal agreement between two parties. This type of debt usually occurs between friends or family and is more difficult to enforce legally. Without a written contract, there is no proof of the loan terms or time frame for repayment.
However, oral contracts can still be legally enforced in some cases. If you have a verbal agreement to repay someone, you can be sued for missing payments within the statute of limitations.
Open-ended
Open-ended accounts are loans that provide a continuous line of credit. As long as you make your payments, you can continue borrowing from the account and taking on debt. Credit cards are the most common example of open-ended accounts.
Because of the high interest rates that come with open-ended accounts, this type of debt can easily become hard to manage. The best way to control your credit card debt is to stay on top of your payments or consider debt consolidation to avoid being sued by a collection agency.
Promissory notes
Similar to a written contract, a promissory note is an agreement between two parties. The agreement outlines the amount of money being loaned, interest rates and the time frame to repay it.
Student loan agreements are the most common example of promissory notes. When you receive federal student aid, you must sign a Master Promissory Note (MPN). The MPN is a promise to repay your loans plus any accrued interest. The statute of limitations for your MPN doesn’t start until after you’re required to start making payments. In most cases, student loan repayment doesn’t begin until after you’ve completed your education.
Your credit agreement
The statute of limitations for your debt might not be determined by your home state. If you borrow from an out-of-state lender, your contract may be subject to that state’s laws, regardless of where you live.
Your contract should specify which state laws are applicable. Before you sign a loan or credit card agreement, be sure to confirm the state and look up the relevant statute of limitations. If you fall behind on your payments and start receiving collection calls, you’ll want to know exactly how long the statute of limitations for your agreement lasts.
Statute of limitations FAQs
Can debt be revived or reset?
The statute of limitations on your past-due debts can be reset when you make a payment. In some states, even a partial payment will reset your debt. If you neglect a payment, make it later — a past statute of limitations doesn't apply once you continue your repayment schedule.
How does it impact your credit score?
Delinquent debt will continue to impact your credit score, even if it's time-barred debt. If you want to improve or repair your credit, you may be able to remove collections from your credit report by disputing them with credit bureaus.
What if you're being sued by debt collectors?
If debt collectors are suing you, you first should check the statute of limitations on your debt. The debt collectors might not be aware that the collection statute of limitations has passed. If it has, they're suing you illegally.
If the statute of limitations is still current, you should meet with an attorney to determine your next steps. Repayment plans, debt consolidation, debt settlement and other measures may help you avoid a lawsuit.
What counts as the start of the statute of limitations clock?
The statute of limitations on bill collection usually starts when you miss a payment. If your credit or loan contract has a "grace" period, the statute of limitations time clock starts once the grace period has passed. For example, a grace period may allow you 10 days to make a payment before incurring late fees. In some states, the statute of limitations begins at the most recent payment before your delinquency.
Pay your unpaid debt to avoid being sued by collection agencies
The statute of limitations on bad debt ensures that you can’t be sued for missed payments decades after they were due. These laws protect borrowers, and you should be aware of them to defend your rights if necessary.
However, the statute of limitations of debt won’t stop debt from accruing interest or impacting your credit score. It also won’t stop your debt collectors from suing before the time period ends. The only way to protect yourself from collections, bank levies and lawsuits is to resolve your unpaid debts as quickly as possible.
If you’re struggling to pay your debt, there are solutions. You may want to consider a debt consolidation loan or, as a last resort, debt settlement. As long as you are making regular payments and working to pay your debts, you can’t be sued by collection agencies.