Statute of limitations on debt collection by State – Forbes Advisor – Forbes Advisor


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Do you have debts that keep you up at night?

It might help you learn more about the statute of limitations in debt collection, which effectively gives a debt collector time to sue you for debt. This legal limit will vary depending on your state and circumstances.

What is a debt limitation period?

The statute of limitations in debt collection is the amount of time a debt collector has to take legal action against someone for debt. It protects debtors from being responsible for their debts forever.

The statute of limitations for debt collection is not the same for all types of debts and in all states. In fact, it is determined by three factors:

  • Type of debt
  • The state you live in
  • The state specified in the contract (if different from the state you live in)

After the expiration of a limitation period, the debt becomes statute-barred. This means that a debt collector no longer has the right to sue the creditor for the debt.

The debt does not disappear after the statute of limitations has passed. Debt collectors can still try to collect the debt, but they cannot legally sue.

The court does not consider when the limitation period passes and your debts become statute-barred. If you are summoned to court for a statute-barred debt, you must show up with documents, such as checks, payment history, and communication records, to prove that the statute of limitations has expired.

Types of debt

Many states have different statutes of limitations depending on the type of debt. Debts are divided into four different categories: written contracts, oral contracts, promissory notes and contracts of indefinite duration.

Written contracts

A written contract is a physical document signed by both the borrower and the creditor. It describes 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 oral agreements, usually between two people who know each other. Because these contracts are not written, they are more difficult to enforce legally.

promissory notes

Similar to a written contract, a promissory note is a written promise to pay. It includes the amount to be paid, who will pay it, the interest terms and a payment deadline. It contains fewer details than a written contract and only requires the borrower’s signature. A common example of a promissory note is a private student loan.

Permanent contracts

Open-ended contracts are accounts that provide a line of credit. This means that even if you owe money, the account remains open, if you make payments. You can constantly borrow and pay off your debts with an open-ended account. Credit cards are a common example of open-ended contracts.

Should you pay debts that have passed the statute of limitations?

Even though you are protected from lawsuits after your debt is barred, you still technically owe it. Also, the statute of limitations has no effect on your credit – an unpaid debt will stay on your credit report for seven years, regardless.

You have three options for settling your prescribed debt:

  • don’t pay. If you don’t pay, collectors can always call you. After all, you still owe the debt. Additionally, outstanding debt can still negatively affect your credit for up to seven years from the date of the original default.
  • Pay the full amount. Paying off your debt could improve your credit score and put an end to persistent debt collectors. It can be difficult if you don’t have money for payment.
  • Settle the debt. You may be able to negotiate a smaller payment with a collector. Just make sure you get a signed agreement that confirms you’re settling the debt and keeping track of your payments. Debt settlement can still have a negative impact on your credit, but less so than non-payment.
  • Make a partial payment. Paying a fraction of the debt can reset the clock on the statute of limitations. This is why making a partial payment (or even promising to do so) is usually not a good idea.

Before making a decision, it’s a good idea to consult a lawyer.

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Statute of limitations by state

Each state has its own statute of limitations for debt. Some states have the same statute of limitations for 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 of their state, not yours. Keep this in mind when considering the statute of limitations for your debts.

The table below shows the different statutes of limitations for each type of debt in each state.


A statute of limitations for debt collection is the time a collector has to take legal action against someone for a debt. The statute of limitations varies from state to state and also depends on the type of debt. Whether the statute of limitations has passed or not, you still owe your unpaid debt and it will appear on your credit report for seven years.

Frequently Asked Questions (FAQ)

When does the countdown to the prescription of debts begin?

Typically, the timer starts on the debt statute of limitations after the last activity on the account. In some states, the timer starts when you first miss a payment on your debt. The limitation period for debts can also be reset in certain cases. For example, in some states, if you make another payment or even acknowledge a debt in writing, the clock may reset.

Are the limitation period for debt collection and your credit report related?

No. Unpaid debts disappear from your credit report after seven years, regardless of the state in which you live. If you live in a state where the statute of limitations is longer than seven years, a debt collector can still sue you for the debt until the statute of limitations has passed, even after the debt is gone. of your credit file.

What is the IRS statute of limitations on collection?

The statute of limitations for state debt collection is different from the IRS statute of limitations for collection. The latter is the length of time the government can pursue the collection of tax debts. The IRS statute of limitations for collection is 10 years.

Is there a statute of limitations for student loan collections?

Private student loans fall under the category of promissory notes, and the statute of limitations depends on your state. However, there is no statute of limitations for federal student loans. This means there is no limit to how long a collector can sue for unpaid federal student loans.


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