What is the statute of limitations on debt?

A statute of limitations may sound like a familiar concept, because it is traditionally associated with the legal system. In legal terms, a statute of limitations is “an enactment in a common law legal system that sets forth the maximum time after an event that legal proceedings based on that event may be initiated”1. In other words, it is a time frame in which legal action may be pursued. For this article, this same concept will be applied to your fiscal matters. To be specific, this article will address how the statue of limitations applies to debt. A statue of limitations on debt, means your debt has an “expiration date” of some sorts and when this date is reached, it may no longer be necessary for you to pay off this debt2.

Statue of Limitations on Debt vs. Credit Reporting Time Limit

A credit reporting time limit, is a time limit concerning debt, but it differs from the Statute of Limitations on Debt. A Credit Reporting Time Limit is the deadline credit agencies can report delinquent debts on your credit report2. This time is usually seven years after the relevant delinquent debt2. By contrast, the statute of limitations for debt is a period of time that a creditor or debt collector can use legal action to pursue a debt2. It is important to know the difference between these two terms.

Length of Statue of Limitations

Sometimes your debt can be passed from one debtor to another, but when your statute of limitations on the debt is reached, you may not have to pay. Typically, the statute of limitations begins on the last date of activity on the account2. The time limit can vary by state, it can range from three to six months or it last up to 15 years2. See a list of statute of limitations by state.

It is important to look up your statute of limitations for your debt. If you are sure it has passed you should not begin payment on this debt, because this will effectively start the period for the statute of limitations all over again.


Sybria White

Sybria White

Sybria White is a senior at the University of North Carolina at Chapel Hill. Upon graduation in May 2010, she will leave Carolina with a Bachelor’s Degree in Sociology, a Certificate in Career Development and will be awarded a Public Service Scholar. She plans to attend graduate school to pursue a Master’s Degree in Public Health following taking a year off to contribute to a National Service Program, such as AmeriCorps. Her undergraduate career has taught her the value of a sociological perspective, which has influenced her dedication to public service. She is a volunteer for W.D. Hill Recreation center, Peer mentor for minority students and has served as an active member of several campus organizations such as Sociology club, North Carolina Health Careers and Access Program, Community Government, and Minority Advising just to name a few.

Apart from contributing public service and active involvement on campus, Sybria is very passionate about creative writing and writing in general and hopes to bring a sociological point of view to her articles. Her interests outside of writing and public service include reading books concerning fashion and spending time with her family.

A well rounded curriculum involving Business and English academics in addition to sociology, have helped shaped this young writers’ unique voice. She is eager to share her newly acquired skills and looks forward to helping others approach every day problems from a new, and perhaps, sociological outlook.
Sybria White

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