A statute of limitations on debt is a period when a creditor, lender, or collections agency can sue you for an unpaid debt. In 22 states, the statute of limitations on most debts is six years; in others, the deadline is between three and 10 years.
A creditor or debt collector cannot sue the borrower after the statute of limitations has ended. If they call and threaten to sue the borrower on an old debt, the borrower has an easy defense.
This article will guide you in understanding how a debt’s statute of limitations protects you and what you should do if debt collectors are contacting you.
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What Is Time-Barred Debt?
A debt that has passed its statute of limitations is considered “time-barred,” which prohibits creditors from suing the borrower. You have no legal obligation to pay back a time-barred debt; however, this doesn’t absolve you from moral responsibility.
Debt will stay on your credit report for over seven years and make it difficult to take out loans or apply for credit cards.
Dealing with time-barred debts is tricky and some debt collections, nicknamed zombie debt collectors, specialize in collecting time-barred debts. A zombie debt collector will buy time-barred debts for as little as two cents per dollar. They hound the borrower until the borrower pays back a part of the debt, which resets the statute of limitations.
Borrowers can prevent zombie debt collectors from contacting them by sending a written notice asking the collector to cease and desist.
How to Tell if Your Debts Are Time-Barred
To know if a debt is time-barred, you will need to know your state laws regarding the statute of limitations.
The count down for the statute of limitations begins once an account is delinquent, about 30 days after missing the final payment. If you live in a state with a six-year statute of limitations, your debt will be time-barred six years after your last payment.
If you’re not sure when your last payment was, you can ask for help from your state attorney general’s office, legal aid, or attorneys specializing in consumer law.
What to Do if Debt Collectors Are Calling You
You need to be careful if debt collectors are calling you. When you don’t pay collections, you may face legal repercussions and damage to your credit score. In some cases, debt collectors attempt to collect debts from the wrong person, meaning that you have no obligation to pay the debt.
The Fair Debt Collection Practices Act (FDCPA) protects borrowers from unlawful collectors.
Here’s how to handle debt collectors in three possible scenarios:
If the Debt Is Legitimate and the Statute of Limitations Is Not Up
If the statute of limitations has not expired, you will need to take the following steps:
- Take detailed notes, including the name of the company, time of the call, the company’s mailing address, and any requests made.
- Don’t admit you owe the debt. Before admitting to the debt or making payments and promises, you will need to verify that all debt information is accurate.
- Request a debt validation letter to double-check all information. The validation protects you from collectors attempting to illegally re-age a debt.
- Be professional but avoid giving information. Collectors might assume you’re taking responsibility for the debt if you give your information.
If the debt is legitimate, you have several options to deal with the collections agency. You can pay the debt partially by negotiating the debt or “paying to delete” to save your credit score.
If the Debt Is Legitimate and the Statute of Limitations Is Up
If the debt is legitimate, but the statute of limitations has ended, you have no legal obligation to pay the debt. The FDCPA prohibits the debt collector from:
- Contacting you before 8 A.M. or after 9 P.M;
- Harassing you or calling multiple times in a row;
- Threatening you or family members;
- Speaking with someone else about your debt;
- Contacting you after you’ve written a letter asking them to stop.
You can write a letter asking the collection agency to stop contacting you. By law, they cannot contact you again asking about your debt. Because the statute of limitations is up, the collections agency can’t sue you.
If the Debt Is Not Legitimate
If the debt is not legitimate, send a debt validation letter to both the collection agency and the creditor within 30 days of the debt collector’s call. If the debt is incorrect, you can send a dispute to the credit bureaus asking to remove the debt from your credit report.
If you believe the collections agency is a scam, report it to the Consumer Financial Protection Bureau.
The Statute of Limitations in Each State
The statute of limitations varies depending on the type of debt. Types of debt include:
- Oral agreements: There is nothing in writing. You have verbally agreed to pay back a debt.
- Written contracts: You and the creditor have both signed a written contract (even if the contract was written on scrap paper). It must include the terms and conditions of the loan.
- Promissory notes: You have signed a written agreement to pay back a debt in monthly or quarterly payments with an interest rate by a certain date.
- Open-ended accounts: The account has a revolving balance from which you borrow funds. Credit cards are a common example of an open-ended account.
Here are the statutes of limitations in each of the 50 states for oral, written, promissory, and open-ended accounts:
|
State |
Oral |
Written |
Promissory |
Open |
|
Alabama |
6 |
6 |
6 |
3 |
|
Alaska |
3 |
3 |
3 |
3 |
|
Arizona |
3 |
6 |
6 |
3 |
|
Arkansas |
3 |
5 |
3 |
3 |
|
California |
2 |
4 |
4 |
4 |
|
Colorado |
6 |
6 |
6 |
6 |
|
Connecticut |
3 |
6 |
6 |
3 |
|
Delaware |
3 |
3 |
3 |
4 |
|
Florida |
4 |
5 |
5 |
4 |
|
Georgia |
4 |
6 |
6 |
6 |
|
Hawaii |
6 |
6 |
6 |
6 |
|
Idaho |
4 |
5 |
5 |
5 |
|
Illinois |
5 |
10 |
10 |
5 |
|
Indiana |
6 |
6 |
10 |
6 |
|
Iowa |
5 |
5 |
5 |
5 |
|
Kansas |
3 |
5 |
5 |
3 |
|
Kentucky |
5 |
10 |
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 |
|
Mississippi |
3 |
3 |
3 |
3 |
|
Missouri |
5 |
10 |
10 |
5 |
|
Montana |
5 |
8 |
8 |
5 |
|
Nebraska |
4 |
5 |
5 |
4 |
|
Nevada |
6 |
6 |
3 |
4 |
|
New Hampshire |
3 |
3 |
6 |
3 |
|
New Jersey |
6 |
6 |
6 |
6 |
|
New Mexico |
4 |
6 |
6 |
4 |
|
New York |
6 |
6 |
6 |
6 |
|
North Carolina |
3 |
3 |
5 |
3 |
|
North Dakota |
6 |
6 |
6 |
6 |
|
Ohio |
6 |
8 |
15 |
6 |
|
Oklahoma |
3 |
5 |
5 |
3 |
|
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 |
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 |
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