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Statute of Limitations on Debt
Creditors only have a limited amount of time to file a suit against you to recover a debt. That time limit is called a
“statute of limitations” because it is a law (statute) which limits the time in which anyone can file a lawsuit to recover a
debt. Once that time limit has passed, they cannot file a lawsuit against you. If they try anyway, you can get the lawsuit
tossed out of court automatically by appearing at court and showing copies of your credit report that reflect the last
date of activity on your account. By just letting the collector know that you are aware of the statute of limitations, it will
generally stop them cold.
There are different types of statutes of limitations, depending on the nature of the original agreement between you and
the creditor.
Oral Agreement – This is a verbal agreement between parties who wish to enter into a contract with each other. Oral
agreements are enforceable by law, but it can sometimes be difficult to prove their existence. These are usually
associated with the sale of personal property for smaller amounts of money.
Written Contract – A written agreement between two or more parties that is binding and enforceable by law. Real
estate deals and insurance policies fall under this category.
Promissory Note – A written document in which the borrower promises to pay a certain amount of money to the lender
according to specified terms. Loans typically fall under this category.
Open-Ended Account – Credit card debt is widely believed to fall under this category, but that is hotly debated in many
state level courts. Some consider credit card debt to be a contract rather than an open ended account.
Statutes of limitations usually run from the last date of payment or activity on an account and can start running all over
again if you make partial payments on your debt, so be careful to NOT make any new payments—even token
payments—on a debt that is very old. Sometimes collectors will try trick you into making only a small token payment
just so they can start the statute of limitations running again.
What is the statute of limitations for debt in your state? Take a look at the follow list to see how different states handle
different types of agreements. The links go to each state’s government web site so that you can see the laws for
yourself.
Click here to see the table of statutes of limitations on debt.
“statute of limitations” because it is a law (statute) which limits the time in which anyone can file a lawsuit to recover a
debt. Once that time limit has passed, they cannot file a lawsuit against you. If they try anyway, you can get the lawsuit
tossed out of court automatically by appearing at court and showing copies of your credit report that reflect the last
date of activity on your account. By just letting the collector know that you are aware of the statute of limitations, it will
generally stop them cold.
There are different types of statutes of limitations, depending on the nature of the original agreement between you and
the creditor.
Oral Agreement – This is a verbal agreement between parties who wish to enter into a contract with each other. Oral
agreements are enforceable by law, but it can sometimes be difficult to prove their existence. These are usually
associated with the sale of personal property for smaller amounts of money.
Written Contract – A written agreement between two or more parties that is binding and enforceable by law. Real
estate deals and insurance policies fall under this category.
Promissory Note – A written document in which the borrower promises to pay a certain amount of money to the lender
according to specified terms. Loans typically fall under this category.
Open-Ended Account – Credit card debt is widely believed to fall under this category, but that is hotly debated in many
state level courts. Some consider credit card debt to be a contract rather than an open ended account.
Statutes of limitations usually run from the last date of payment or activity on an account and can start running all over
again if you make partial payments on your debt, so be careful to NOT make any new payments—even token
payments—on a debt that is very old. Sometimes collectors will try trick you into making only a small token payment
just so they can start the statute of limitations running again.
What is the statute of limitations for debt in your state? Take a look at the follow list to see how different states handle
different types of agreements. The links go to each state’s government web site so that you can see the laws for
yourself.
Click here to see the table of statutes of limitations on debt.
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