What is the Statute of Limitations on Debt Collection and Judgments?

You might falsely believe that your debts are no longer collectible after 7 years. However, depending on the laws of each state, your creditors may have as few as 3 years or as many as 15 to sue you, regardless of how long it is reported on your credit. The statutes of limitations on debt collection varies by state as well as the type of debt.

Statute of Limitations by State
Alabama Alaska Arizona
Arkansas California Colorado
Connecticut Delaware DC
Florida Georgia Hawaii
Idaho Illinois Indiana
Iowa Kansas Kentucky
Louisiana Maine Maryland
Massachusetts Michigan Minnesota
Mississippi Missouri Montana
Nebraska Nevada New Hampshire
New Jersey New Mexico New York
North Carolina North Dakota Ohio
Oklahoma Oregon Pennsylvania
Rhode Island South Carolina South Dakota
Tennessee Texas Utah
Vermont Virginia Washington
West Virginia Wisconsin Wyoming

Determining the Classification of Debt

The first thing you have to do is to evaluate the type of debt that you owe. Oral contracts are usually sealed by a handshake, but they are difficult to prove even with a witness. They may have a different life than a promissory note. Promissory notes are records of debts agreed to between two parties. These are the most informal type of recorded debt.

Written contracts are official debts that are created when a debt application is approved. These contracts are subject to numerous regulations that must be followed in order for the contracts to be valid. Written contracts can range from simple loan documents to complicated mortgage contracts.

Open contracts deal with revolving lines of credit. These can include an unsecured line of credit at the bank, a home equity line of credit (HELOC) or most commonly, credit cards. To complicate matters, some states have ruled that a credit card could be considered to be a written contract rather than an open contract if the applicant signed a written application as opposed to completing an online application. In such matters, qualified legal counsel may be necessary to determine which rule applies. Of course, if the statute of limitations on written and open contracts is the same, then that eliminates some confusion.

Determining Jurisdiction of State

The statute of limitations for your state on the type of debt will dictate how long a debt collector may pursue legal action against you. If you have moved from one state to another, then determining which state’s statute of limitations can be a complicated matter.

One state may be deemed to have more relevance than another. Questions to ask include:

  • What state were you a legal resident of when you obtained the debt?
  • What state were you a legal resident of when you defaulted on the debt?
  • What state are you a legal resident in now?

There may be time factors as well that could determine which state’s statute of limitations might be most applicable to your situation. How long you lived in each state could be taken into consideration.

Of course, your debt collectors will automatically declare whichever state that you might possibly be subject to the laws of that has the longest statute of limitations on your debt. It is up to you to contest the state of relevance if you believe that you are protected by the laws of a different state than what you creditor believes.

Ultimately a judge could decide if you are actually sued for the debt. Unless you appear to contest the legality, you might be unfairly required to pay a debt that should no longer be collectible.

The statute of limitations on debt generally only applies to legal action that may be taken against you. It does not limit a debt collector from pursuing other avenues of debt collection, including telephone calls and sending collection letters by mail.

Some states however are taking note. North Carolina passed the Consumer Economic Protection Act of 2009 which bans debt collectors from pursuing debts in which the statute of limitations has expired. If you believe that your rights have been violated by a debt collector, you may wish to consult with an attorney regarding a possible lawsuit for FDCPA violations or encroachment of other applicable protections.