Statute of Limitations for Debts and Collection

Peter Francis Geraci

Written by

Bankruptcy Attorney - Chicago, IL

Contributor Level 10

Posted over 6 years ago. 42 helpful votes


We've all heard the term "statute of limitations." What many people don't know is that the statute of limitations also applies to debt collection.


Statute of Limitations for Collection of a Debt

For ordinary debts such as contracts, credit cards, medical bills, repossessions, checks, and most consumer debt, the creditor is limited to a period in which it can collect. That is called the "statute of limitations" Each state has various "statutes of limitations" that apply to different types of debts. A state may have hundreds of "statutes of limitations". Damage to property can have a different "statute of limitation" than damage for personal injury, or collection of a medical bill.


How Statute of Limitations Work

If more time has passed than the statute of limitations allows, the debtor may have a defense to collection based on the passage of too much time, as specified in the statute of limitations for that type of debt. The statute of limitations starts on the last date of activity on the account. (Keep in mind this can be different from the date the account went past due.) A credit report will include the account's last date of activity.


When a Statute of Limitations Can Be Extended or Restarted

The statute of limitations can be restarted. Anytime a debtor takes certain actions in connection with an account, the statute of limitations is restarted. Any of the following can restart the statute of limitations on an account: o Making a payment o Making a promise of payment o Entering into a payment agreement o Making a charge using the account. When the clock restarts, it restarts at zero, no matter how much time had elapsed before the activity.


How to Find Your State's Statute of Limitations

The statute of limitations is usually between three and six years. lists the statute of limitations for each state and links to the state statutes. Choice of law may permit using statute of limitations in state where debt incurred if debt is now in another state. Some debts don't have a statute of limitations, such as student loans, child support in some states, and income taxes.


How to Defend a Collection Lawsuit Based on Statute of Limitations Expiring

This is a job for an attorney. Generally, you must file a written pleading stating your defense, such as that the statute of limitations on the debt has expired, and have a judge rule on your defense. The defense of statute of limitations is usually raised in a pleading called "Affirmative Defense"

Additional Resources has a listing of state statutes of limitations

Statute of limitations for debt

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