Can A Debt Collector Sue Me Because Of My Debt?

What is the statute of limitations for debt

As stressful as being in debt can be, the millions of Americans who do share this burden should take some comfort in knowing that not even debt lasts forever. Debt collectors have a certain time period in which they can sue to collect from debtors. This is called the statute of limitations (SOL) and when it takes effect varies depending on the state in which the debt was incurred. For some states, the window is as small as 3 years while in others it can be as long 10. However long the SOL lasts, people who are in debt should understand this concept and what their options are at the end of that time.

How does the statute of limitations for debt affect you and your credit

Debts that remain unpaid after the SOL takes effect are called ‘time-barred debts’ and many people are unaware of what to do when they are contacted by collectors. The first thing to understand is that the period owing on the debt usually begins when you fail to make a payment. Secondly, when the SOL applies depends on the type of debt agreement that was made.

Some states, for example, make a distinction between whether or not the original contract was oral, written or based on a promissory note. Regardless of the type of debt you owe, creditors can still contact you after the SOL has expired and ask you to pay. In these cases, collectors are required by law to inform debtors that the SOL has expired and that they cannot sue. However, you should be cautious and seek confirmation about when the debt went into default.

Unfortunately, some debt collectors will try to collect on a debt even after the statute of limitations has come into effect.  This is why it is important to have documentation in the form of contracts, dates, receipts etc. This is essential if the SOL is ever disputed in court. Some people, because they did not bother to confirm whether or not their debt was time-barred, have had court judgments go against because they neglected to check this.

Should You Pay Time-Barred Debts?

If you have been contacted by a collector about a time-barred debt you have three options: Pay the debt, don’t pay the debt or pay a portion of the debt. If you decide to pay the debt, you may succeed in improving your credit score. Having an improved credit score can save you money when it comes to purchasing a home, car or securing a credit card. One caution: Make sure you have a signed statement from the debt collector if you choose this option. This is because it may be treated as a partial payment and actually reset the debt and the SOL. You can pay nothing on the debt. Although this is up to you know that not paying on a debt will continue to adversely affect your credit score. Finally, if you elect to make a partial payment on a time-barred debt this will, in turn, reset the clock on the SOL.  Meaning if you do not make any more payments, the date of the charge off is now the date of your last payment.  Even if before you made that payment the debt was several years old.

Things to keep in mind:

  •  A collector who is threatening to sue you over a time-barred debt may be in violation of the law
  •  Time-barred debts may still appear on your credit report. (This is because negative items usually remain on your for 7 years.)
  • Paying on a time-barred debt can reset the clock on the debt. Make sure you have a written document from the collection firm stating this payment pays the debt off in full. Make sure it’s on their company letterhead just in case they try to put it back on your credit report as a partial payment of the debt

Ultimately, knowing all you can about the statute of limitation for debt will help give you better options. For any debt issues for which you are unsure, it is advised that you contact an attorney and/or become familiar with the Fair Debt Collection Practices Act (FDCPA) in order to know your rights a debtor.

Statutes of limitations for each state (in number of years)

State
Written contracts
Oral contracts
Promissory Notes
Open-ended accounts (including credit cards)
Alabama
6
6
6
3
Alaska
3
3
3
3
Arizona
6
3
6
3
Arkansas
5
3
5
5
California
4
2
4
4
Colorado
3
3
3
3
Connecticut
6
3
6
3
Delaware
3
3
3
3
D.C.
3
3
3
3
Florida
5
5
4
4
Georgia
6
4
4
4
Hawaii
6
6
6
6
Idaho
5
4
5
4
Illinois
10
5
10
5
Indiana
6
6
6
6
Iowa
10
5
10
5
Kansas
5
3
5
5
Kentucky
15
5
10
5
Louisiana
10
10
10
3
Maine
6
6
20
6
Maryland
3
3
12
3
Massachusetts
6
6
6
6
Michigan
6
6
6
6
Minnesota
6
6
6
6
Mississippi
3
3
3
3
Missouri
10
6
3
5
Montana
8
5
5
5
Nebraska
5
4
5
4
Nevada
6
4
3
4
New Hampshire
3
3
6
3
New Jersey
6
6
6
6
New Mexico
6
4
4
4
New York
6
6
6
6
North Carolina
3
3
3
3
North Dakota
6
6
6
6
Ohio
8
6
6
6
Oklahoma
5
3
6
5
Oregon
6
6
6
6
Pennyslvania
4
4
4
4
Rhode Island
10
10
10
10
South Carolina
3
3
3
3
South Dakota
6
6
6
6
Tennessee
6
6
6
6
Texas
4
4
4
4
Utah
6
4
4
4
Vermont
6
6
14
6
Virginia
5
3
6
3
Washington
6
3
6
6
West Virginia
10
5
6
5
Wisconsin
6
6
10
6
Wyoming
10
8
10
6

Updated: July 3, 2020

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Elizabeth Roberts

Elizabeth Roberts

Liz Roberts and her team are continuously providing information to people who are ready to repair their credit and improve their credit score. Also NewHorizon.org team strives to empower the homebased and small business owners by bringing information that can help them to manage and grow their businesses. Let our 24+ years of business finance experience help you to get the financing you need! CONTACT US if need financing for your business.

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NewHorizon.org is an independent, advertising supported website. The owner of the site may be compensated in exchange for featured placement of certain sponsored products and services, or your clicking on links posted on this website. NewHorizon.org has not reviewed all available credit card offers in the marketplace.

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