Statute of Limitations on Debt
If creditors have been hounding you about old debts, you might be in luck. The law says that they only have a limited time in which to take legal action. This time limit is called a statute of limitations.
A statute of limitations is defined as a law which sets deadlines for filing lawsuits within a certain time after events occur that are the source of a claim. In plain English, creditors have only a limited amount of time to file a lawsuit against you in order to recover a debt. Once that time limit has passed, they will not have a case against you. A statute of limitations is an absolute defense, and once a creditor realizes that you know this, they are more likely to back off. Do note that statutes of limitations don’t affect a creditor’s right to hire collection agencies to keep trying to recover old debts from you. The statutes simply prevent them from seeking legal recourse.
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 extended that is not supported by a formal, written agreement. 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.
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. There are even links to each state’s government web site so that you can see the laws for yourself.
State
| Oral
| Written
| Promissory
| Open-Ended
| State Statute(s)
|
Alabama
| 6
| 6
| 6
| 3
| 6-2-34, 6-2-37
|
Arkansas
| 5
| 5
| 5
| 3
| 16-56-105
|
Alaska
| 6
| 6
| 3
| 3
| 09.10.053
|
Arizona
| 3
| 6
| 6
| 3
| 12-543, 12-548
|
California
| 2
| 4
| 4
| 4
| 336a-337
|
Colorado
| 6
| 6
| 6
| 3
| 13-80-101,
13-80-103.5
|
Connecticut
| 3
| 6
| 6
| 3
| 52-576, 52-581
|
Delaware
| 3
| 3
| 3
| 4
| 2-725
|
D.C.
| 3
| 3
| 3
| 3
| 12-301
|
Florida
| 4
| 5
| 5
| 4
| 95.11
|
Georgia
| 4
| 6
| 6
| 4
| 9-3-24, 9-3-25
|
Hawaii
| 6
| 6
| 6
| 6
| HRS 657-1(4)
|
Iowa
| 5
| 10
| 5
| 5
| 614.1, 614.5
|
Idaho
| 4
| 5
| 5
| 4
| 5-216, 5-217
5-222
|
Illinois
| 5
| 10
| 10
| 5
| 735 ILCS 5/13-205, 735 ILCS 5/13-206
|
Indiana
| 6
| 10
| 10
| 6
| 34-11-2-7, 34-11-2-9
|
Kansas
| 3
| 6
| 5
| 3
| 84-3-118
|
Kentucky
| 5
| 15
| 15
| 5
| 413.090, 413.120
|
Louisiana
| 10
| 10
| 10
| 3
| CC 3494,
CC 3499
|
Maine
| 6
| 6
| 6
| 6
| 14-752
|
Maryland
| 3
| 3
| 12
| 3
| 5-101, 5-102
|
Massachusetts
| 6
| 6
| 6
| 6
| 260-2
|
Michigan
| 6
| 6
| 6
| 6
| 600.5807, 600.5813
|
Minnesota
| 6
| 6
| 6
| 6
| 541.05
|
Mississippi
| 3
| 3
| 3
| 3
| 15-1-29, 15-1-49
|
Missouri
| 5
| 10
| 10
| 5
| 516.110, 516.120
|
Montana
| 3
| 8
| 8
| 5
| 27-2-202
|
North Carolina
| 3
| 3
| 3
| 3
| 1-52
|
North Dakota
| 6
| 6
| 6
| 6
| 28-01-16
|
Nebraska
| 4
| 5
| 5
| 4
| 25-205, 25-206
|
New Hampshire
| 3
| 3
| 6
| 3
| 382-A:3-118
|
New Jersey
| 6
| 6
| 6
| 3
| 25:1-5
|
New Mexico
| 4
| 6
| 6
| 4
| 37-1-3, 37-1-4
|
Nevada
| 4
| 6
| 3
| 4
| NRS 11.190
|
New York
| 6
| 6
| 6
| 6
| 2-213
|
Ohio
| 6
| 15
| 15
| 6
| 2305.06, 2305.07
|
Oklahoma
| 3
| 5
| 5
| 3
| 12-95
|
Oregon
| 6
| 6
| 6
| 6
| 12.080
|
Pennsylvania
| 4
| 4
| 4
| 4
| Title 42 Ch.55
|
Rhode Island
| 10
| 5
| 6
| 4
| 6A-2-725
|
South Carolina
| 3
| 3
| 3
| 3
| 15-3-530
|
South Dakota
| 6
| 6
| 6
| 6
| 15-2-13
|
Tennessee
| 6
| 6
| 6
| 3
| 28-3-105,
28-3-109
|
Texas
| 4
| 4
| 4
| 4
| 16.004
|
Utah
| 4
| 6
| 6
| 4
| 78-12-23,
78-12-25
|
Virginia
| 3
| 5
| 6
| 3
| 8.01-246
|
Vermont
| 6
| 6
| 5
| 3
| 3-118
|
Washington
| 3
| 6
| 6
| 3
| 4.16.040,
4.16.080
|
Wisconsin
| 6
| 6
| 6
| 6
| 893-43
|
West Virginia
| 5
| 10
| 6
| 5
| 55-2-6,
55-2-6a
|
Wyoming
| 8
| 10
| 10
| 8
| 1-3-105
|
Remember that if your creditor is based in a different state than you, they have the choice of which state to sue in. Usually, they choose the state with the longer statute of limitations. Be sure to check your credit report to see the date of last activity on the account. That date will tell you when your statute of limitations began.
Statutes of limitations can be postponed if you make partial payments on your debt, beginning on the date that you made the most recent payment on the account. Also, some judgments have held that credit card accounts are considered actual contracts, which are subject to longer statutes of limitations.
If you’re being sued by a creditor after the statute of limitations has passed, show up in court to fight the charge. Bring your credit report and any other documentation that proves the date of last activity on the account. With this proof in hand, you’ve provided an absolute defense against the creditor’s charges, and their case will be thrown out of court.
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