What Is the Statute of Limitations on Debt?
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The statute of limitations on debt is a rule limiting how long a creditor can sue you for payment on a debt.
Most consumer debts, from credit card balances to medical bills, have limits on the number of years creditors have a legal right to sue you for payment. But a debt can still remain on your credit report after the statute of limitations has passed.
How long is the statute of limitations on debt?
The statute of limitations on debt is typically between three and six years, but it varies by state and type of debt. In some states, the statute of limitations for credit card debt is three years. In others, it’s up to 10. In more than 20 states, the statute of limitations on private student loans is six years.
Generally, state law where you live determines the statute of limitations on specific debts, even if you incurred the debt elsewhere. However, some creditors add clauses to their agreements saying a specific state’s laws will govern the contract regardless of where the customer lives.
Tread carefully if debt collectors are hounding you, because making even one payment on an expired debt can reset the clock and revive the creditor’s ability to sue you.
What is time-barred debt?
Time-barred debt means the statute of limitations on the debt has passed. Debt collectors can’t legally sue or threaten to sue you for time-barred debt — but they may still try. Your obligation to pay, however, stays on the books.
How to find out if your debt is past the statute of limitations
The clock on the statute of limitations typically starts when you miss a payment. In some states, it starts when the most recent payment was made. If you haven’t made any payments, the clock may have started when you took out the debt or when it was marked delinquent.
There are a few ways to find out whether the clock has run out:
Get information from the debt collector
Debt collectors have a legal obligation to give you information about the debt they’re attempting to collect. Asking for details can help you determine if a debt is past its statute of limitations.
You can ask the debt collector whether the debt is time-barred. If they answer the question, they’re required by the Fair Debt Collection Practices Act to answer truthfully. However, they’re not required to answer it at all.
If a debt collector won’t reveal this information, refer to the debt validation letter. A collector must send you this letter within five days of first contact; if you haven’t received it, ask for it. This notice should include the amount owed, the date of the last payment, the collector and how to request information on the original creditor.
Be careful when you talk with collectors. Don’t promise to make a payment or give them any payment information, such as a bank account, because they may take that as acceptance of the debt.
» MORE: How to deal with debt collectors
Ask a professional for help
You may want to seek legal help from a professional versed in the consumer laws of your area. These sources can help you find the statute of limitations on debts you face. The best option for you depends on your time and budget:
State attorney general’s office: Can provide free general legal information but may be hard to reach for more personalized help.
Local legal aid: Can provide free or low-cost help, but the attorneys and paralegals are often overbooked. You may have to meet a certain income requirement to qualify for services.
A consumer attorney: Can offer personalized and faster help, but usually at a higher cost.
How to handle time-barred debt in collections
Challenge it
If you’re being asked to pay a time-barred debt that isn’t yours, was already paid off or is otherwise invalid, you can write the creditor to say you’re disputing the debt.
You have 30 days from first contact by the debt collector to challenge the debt before it's deemed accepted by default. If you dispute the debt within this window, debt collection efforts must stop until the issue is resolved.
You can still challenge the debt after the 30-day period, but the collector can contact you for payment while your dispute is being investigated.
Be as specific as possible in your letter. Say why the debt collection attempt is not valid, including information about payment history or why the debt may not be yours and any other relevant information. It’s best to send the letter by certified mail so you get confirmation of receipt.
You may want to seek legal advice while the case is being investigated, because the challenge process can be complex.
If you think a debt collector is violating your consumer rights, you can also file a complaint with the Consumer Financial Protection Bureau or contact your state’s attorney general office.
Pay it off — but beware of resurrecting zombie debt
Paying off the debt can get you out of collections, but be sure you can afford to pay the whole amount, including any fees or penalties.
Although you may think paying at least a little bit will get the creditor off your back, it can make things much worse instead. Making even a single payment on time-barred debt can be the lightning bolt that brings it back from the dead and resets the statute of limitations.
» Learn more about zombie debt
If you do want to pay, you have a few options:
Pay in full with a lump sum.
Work with the creditor to set up a payment plan.
Make a deal to settle the debt by paying a portion.
Paying in full can get the debt off your back for good, but make sure you get the agreement in writing first. Keep this proof in case the payment isn’t recorded correctly or the debt somehow gets sold again to another collector.
You may also get the collector to accept a percentage of what you owe as settlement of the debt, but be careful. The debt may not be gone for good.
Unless you get a written agreement explicitly stating that the partial payment will cover the whole debt, the collector can sell the remainder of what you owe to another debt collection company — which can then come after you. The debt will be marked as a partial payment on your credit report, which won’t look good to potential creditors in the future.
Keep track of your communications and payments in case the creditor doesn’t stick to the deal. Written correspondence is most easily documented; if you choose to communicate by phone, record the time, the date and the name of the person you spoke with.
Discharge the debt through bankruptcy
If you want to rid yourself of this liability for good but can’t afford to pay it off, you could file for Chapter 7 bankruptcy.
This gets the unpaid debt in collections off your plate. However, the mark from the bankruptcy will effectively replace it for the next several years. You are likely to see your credit scores recover after you file, though.
Ignore it — but know it may still follow you
When debt is time-barred, you can’t be sued for payment — but the debt doesn’t go away. You may ignore it, but debt collectors and your credit reports won’t.
Most delinquent debts can remain on your credit reports for about seven years. You’ll have a harder time getting new lines of credit and will face higher interest rates.
Further, debt collectors can continue to pursue payment. If you ignore the debt long enough, you risk the current collector selling the debt again — and you’ll have to go through the cycle again with a new collector.
What to do if you’re sued for a debt that’s past the statute of limitations
Beyond trying to seek payment, creditors may sue you even though a debt is past its statute of limitations. It’s against the Fair Debt Collection Practices Act for a debt collector to sue you for a time-barred debt, so you can file a complaint with the CFPB and your state attorney general’s office.
The most important thing: Don’t ignore a lawsuit. Ignoring it likely would lead to an automatic judgment against you, which can mean wage garnishment. Pay attention to any notices you receive, act quickly and assert your consumer rights.
Consider talking with an attorney about how to proceed, and gather all documents you have proving that the debt is time-barred. If the case goes to court, you’ll likely submit evidence of the date of last payment and information about the bill. Simply stating that the debt is time-barred should be enough to get the case thrown out.
