Debt Relief
Your Rights Under State Law
Statute of Limitations on Debt Collection
Each state limits how long a debt can be collected. After a set period of time has passed, an unpaid debt is considered by law to be a "time-barred debt" and is uncollectable. More precisely, the debt collector can still try to collect the debt, but they cannot sue you for it. Without the ability to sue, the most a creditor can do is report the delinquent account on your credit report for up to seven years. The clock starts ticking from the day you last made a payment on that account and the clock gets reset if you make a payment, even a partial payment! This is why I do not recommend making any payments on delinquent accounts unless you are prepared to settle the account.
To determine what the statute of limitation is in your state, consult the chart below and confirm with your state's Attorney General's office.
| Alabama | 3 years |
| Alaska | 3 years |
| Arizona | 3 years |
| Arkansas | 5 years (2 years for medical debt) |
| California | 4 years |
| Colorado | 6 years |
| Connecticut | 6 years |
| Delaware | 3 years |
| District of Columbia | 3 years |
| Florida | 5 years |
| Georgia | 4 years |
| Hawaii | 6 years |
| Idaho | 5 years |
| Illinois | 10 years |
| Indiana | 6 years |
| Iowa | 5 years |
| Kansas | 5 years |
| Kentucky | 5 years |
| Louisiana | 3 years |
| Maine | 6 years |
| Maryland | 3 years |
| Massachusetts | 6 years |
| Michigan | 6 years |
| Minnesota | 6 years |
| Mississippi | 3 years |
| Missouri | 5 years |
| Montana | 8 years |
| Nebraska | 4 years |
| Nevada | 4 years |
| New Hampshire | 3 years |
| New Jersey | 6 years |
| New Mexico | 4 years |
| New York | 6 years |
| North Carolina | 3 years |
| North Dakota | 6 years |
| Ohio | 6 years |
| Oklahoma | 3 years |
| Oregon | 6 years |
| Pennsylvania | 4 years |
| Rhode Island | 10 years |
| South Carolina | 3 years |
| South Dakota | 6 years |
| Tennessee | 6 years |
| Texas | 4 years |
| Utah | 4 years |
| Virginia | 3 years |
| Vermont | 3 years |
| Washington | 6 years |
| West Virginia | 5 years |
| Wisconsin | 6 years |
| Wyoming | 8 years |
Make sure you consult your actual state statute and verify the times listed above (search the internet for "unsecured debt statute of limitations yourstate"). Some states start the clock from the date of your first missed payment, while others start the clock from the date the original creditor charges-off your account (usually six months after the date of your first missed payment).
If a debt collector contacts you after your state's statute of limitations has expired, write a letter (certified mail with return receipt) to the debt collector stating that the account is no longer collectible and instruct them to cease all communication and collection efforts (a notification of time-barred debt sample letter can be found in the Resource Library). If you are sued by a creditor after your state's statute of limitations has expired, simply provide the court a copy of your state's statute and a copy of your credit report showing the date of your first missed payment and/or the date of charge-off by the original creditor.
Keep in mind that after the statute of limitations has expired on your debt, it can still be legally reported on your credit report for up to seven years. However, a time-barred debt is less likely to be verified by the creditor and is therefore easier to remove through a formal dispute with the credit bureaus.
If you live in a state with a long statute of limitations period, don't despair. In my experience if you are going to be sued, it will most likely happen in the first couple of years. The reason is because your collection account diminishes in value to a debt collector over time. Since the most expensive collection activity is to sue, chances are a debt collector will sue—if they are going to—while the account is still fresh. That is not to say that you won't be sued after a couple of years, but the odds drop off dramatically over time.
Now that you know the major players, how debt collection works, and more importantly your state and federal rights, it's time to put it all together.
> Putting It All Together
