top of page

Is There A Statute of Limitation on Debt Collection?

Imagine one day your looking at your credit report casually.

You notice you have a collection on your account from a bill you once had years ago.

Now, you know you didn't stick to the agreement and fell behind on the bill.

But why are you just now seeing it in collections? Can they do that?

Know your rights when it comes to debt collections, there are statutes of limitations that can protect you.

The real question is: Is there a statute of limitations on debt collection?

What is a statute of limitations on debt?

A statute of limitation on debt is just a limit on the amount of time creditors can take legal action to collect a debt.

This offers you a level of protection if you're sued for a loan you took out years ago.

Your defense could be that the loan is too old.

When does the timer start?

In other states, the clock starts based on your most recent payment, even if that payment was during collection. Partial payments count as well.

It's also important to note that any acknowledgment of the debt to the creditors or debt collectors restarts the clock.

What is a time-barred debt?

Once a debt is past the statute of limitation, it is considered time-barred.

This means that the creditor or debt collector can no longer legally pursue it.

How does it work for debt collection?

So now that we know, most states have a statute of limitation on debt.

What is the best thing to do if your debt is time-barred?

First, you must understand that the debt is still owed to the debt collector.

However, if a creditor takes legal action after the statute of limitations, this could allow you ammunition to file a dispute.

So you have about 3 options moving forward:

  • Negotiate and Settle- because the debt is still owed, if you're planning to make any large purchases anytime soon, you may want to negotiate a lower payment and settle the debt.

  • Pay the debt in full- you could pay the debt in full, especially if it's not a large amount. This can sometimes be easier than negotiating the debt.

  • Don't Pay- lastly, you could not pay the debt at all and let it charge off your account after 7 years. Keep in mind that this charge-off can affect your credit score.

Types of Debt that can have a statute of limitation?

Written Contracts

Written contracts serve the essential function of documenting a legally binding agreement between two parties, regardless of their form.

Both parties sign a physical document that outlines the loan's terms and conditions.

Oral contracts

Oral contracts are spoken agreements that are more challenging to enforce legally since they are not documented in writing and are typically made between acquaintances.

Beware of these types of contracts even amongst close friends and family.

Promissory notes

Promissory notes are similar to written contracts. They are less detailed than written contracts and only require the borrower's signature.

Open-ended contracts

Open-ended contracts are accounts that provide a credit line, allowing borrowers to borrow and repay debt constantly as long as they make payments.

What is the statute of limitations for your state?


Statute of limitation by states A-L


Statute of limitation by states M-O


Statute of limitations by states P-W

How to handle a lawsuit after the statute of limitation?

Ok. So, knowledge is power, and now that you have a bit more knowledge, here's what to do if you get a suit.

You know, a lawsuit for your time-barred debt.

You have the power to fight back or dispute the claim.

Remember, once the item is passed the statute of limitations, creditors can not take legal action against you.

This lawsuit could cause you to get the debt erased from your credit report because of their shady dealings.

But consult with a lawyer to know for sure.

Most lawyers offer free consultations to help you figure out where you stand or what action you should take.

Major Take Away

So short answer to your question.

Yes. There is a statute of limitation on debt collection.

However, not all debts carry a statute of limitations. For example, most federal loans, some private loans, child support, and income taxes do not carry a statute of limitations.

Also, the statute of limitations does not mean the debt is no longer owed. It just means the time is up for a creditor to take legal action to collect the debt.

So, know your rights and monitor your credit often.

Recent Posts

See All


Rated 0 out of 5 stars.
No ratings yet

Add a rating
bottom of page