What Are The Statute of Limitations on Debt by State?
You may not realize it, but as soon as you take on a debt, there is a clock that is unknown to you that starts ticking. This is important for you to know because it means how long a creditor can come after you for payment of that debt. No one takes on a debt, planning to default or not pay it. Unexpected things do happen that may prevent you from being able to pay your debts. Continue reading to find out more about the statute of limitations on debt and how it changes by state.
If you have any type of debt, which just about everyone does, it is important to understand the statute of limitations on debt. In the simplest terms, a statute of limitation on debt means the maximum length of time a creditor can attempt to take action against you for your debt.
Every type of debt, including a mortgage, credit cards, and car loans, has a statute of limitations. Most of the time, it starts once you miss a payment, but in some cases, it begins as soon as you take on the debt. The state dictates the length of time, but it can range from 3 years to as many as 21 years. In many cases, debt collectors will still attempt to collect the debt even after the statute of limitations ends. They are still legally able to send letters or call you. They cannot sue you or threaten to sue you.
Statute of Limitations by State
While the state in which you live typically governs that limitation on your debt, many credit cards are not based in the same state as you. The state in which they are based may govern the statute of limitations for that particular debt.
The list below is effective as of 2022.
| State | Oral Agreements (in years) | Open-Ended Accounts (in years) | Written Contracts (in years) | Promissory Notes (in years) |
|---|---|---|---|---|
| Alabama | 6 | 3 | 6 | 6 |
| Alaska | 3 | 3 | 3 | 3 |
| Arizona | 3 | 6 | 6 | 6 |
| Arkansas | 3 | 5 | 5 | 5 |
| California | 2 | 4 | 4 | 4 |
| Colorado | 6 | 6 | 6 | 6 |
| Connecticuat | 3 | 6 | 6 | 6 |
| Delaware | 3 | 3 | 3 | 3 |
| Florida | 4 | 5 | 5 | 5 |
| Georgia | 4 | 5 | 5 | 5 |
| Hawaii | 6 | 6 | 6 | 6 |
| Idaho | 4 | 4 | 5 | 5 |
| Illinois | 5 | 5 | 10 | 10 |
| Indiana | 6 | 6 | 6 | 10 |
| Iowa | 5 | 5 | 10 | 10 |
| Kansas | 3 | 3 | 5 | 5 |
| Kentucky | 5 | 10 | 10 | 15 |
| Louisiana | 10 | 3 | 10 | 10 |
| Maine | 6 | 6 | 6 | 20 |
| Maryland | 3 | 3 | 3 | 6 |
| Massachusetts | 6 | 6 | 6 | 6 |
| Michigan | 6 | 6 | 6 | 6 |
| Minnesota | 6 | 6 | 6 | 6 |
| Mississippi | 3 | 3 | 3 | 3 |
| Missouri | 5 | 5 | 10 | 10 |
| Montana | 5 | 5 | 8 | 8 |
| Nebraska | 4 | 4 | 5 | 5 |
| Nevada | 4 | 4 | 6 | 3 |
| New Hampshire | 3 | 3 | 3 | 6 |
| New Jersey | 6 | 6 | 6 | 6 |
| New Mexico | 4 | 4 | 6 | 6 |
| New York | 6 | 6 | 6 | 6 |
| North Carolina | 3 | 3 | 3 | 3 |
| North Dakota | 6 | 6 | 6 | 6 |
| Ohio | 6 | 6 | 6 | 6 |
| Oklahoma | 3 | 3 | 5 | 6 |
| Oregon | 6 | 6 | 6 | 6 |
| Pennsylvania | 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 | 4 | 4 | 6 | 6 |
| Vermont | 6 | 6 | 6-14 | 8 |
| Virginia | 3 | 3 | 5 | 6 |
| Washington | 3 | 6 | 6 | 6 |
| West Virginia | 5 | 5 | 10 | 6 |
| Wisconsin | 6 | 6 | 6 | 10 |
| Wyoming | 8 | 8 | 10 | 10 |
What Are Time-Barred Debts?
While it is important that you understand the statute of limitations on debt, it is equally important that you understand a time-barred debt. When a debt has passed the statute of limitation, it becomes a time-barred debt. This means that creditors are legally prevented from taking you to court over your debts. They can still attempt to collect the money with letters and phone calls. The debt still remains your debt, and you are obligated to pay it. This debt still impacts your credit score, and it can be seen by those providing your credit in your future.
This does not mean you should just not pay your debts and ride it out until it becomes time-barred. These debts still remain as your debts. Remember, it still impacts your credit score and appears on your credit report, which will most certainly impact your ability to obtain credit in the future.
Where Can I Find Help?
Just because a creditor is no longer able to sue you once you have surpassed the statute of limitations on debt does not mean they will not try. They may even push it so far that you have to appear in court. You should go to court prepared to show that the debt is too old for the creditor to come after you. This could include proof of the last payment you made for the debt or the record of communication between you and the creditor.
If you require more assistance, you find an attorney specializing in this situation to assist you. There is legal aid help available that may come at a lesser cost. You could reach out to the office of your state attorney general.
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What are the Different Categories of Debts?
The statute of limitations on debt is dependent on a couple of different factors, such as the type of debt and the state in which you live. There are typically four different categories for debts. Each state has its own set of rules for each kind of debt, and you should be sure you understand how the state in which you live handles the particular kind of debt.
Oral Agreement
These are deals that you make with a spoken promise, such as a handshake, with no paperwork to support the deal. This is often more informal types of agreements. They are difficult to prove. This kind of deal usually has a shortened time frame for the statute of limitations because it is based on memory.
Written Contracts
A written contract is an agreement on paper that is signed by you and the creditor stating that you agree to what is outlined on the paper. That paper could be anything, even a napkin. This document must include all of the conditions and terms of the loan agreement. It outlines what the lender is allowing you to borrow and what you are obligated to pay back, and when. These written contracts may include home improvements or medical expenses.
Open-Ended Accounts
An open-ended account is a type of account that has a revolving line of credit, which includes a cycle of borrowing and repayment. These accounts include credit cards and store accounts.
Promissory Notes
Promissory notes are a debt that involves a written agreement to pay back the debt in a certain amount of time, with a set number of payments, and in a certain amount of money. These agreements typically include a percentage rate, and that is included in the promissory note. Mortgages and car loans fall into the promissory note category.
What Happens When a Debt Has Passed the Statute of Limitations?
Remember, just because the debt is past the statute of limitations does not mean that you cannot be sued and even required to show up in court. If a debtor sues you and you are required to appear in court, it is in your best interest to do so. If you do not, the court can make a decision and order you to repay the money simply because you appear to be not cooperating. While it is stressful, you must appear and come prepared with all of your documents to show that you are passed the statute of limitations.
You still have to pay back your debt, and being past the statute of limitations may buy you some time. This time should be used to create a plan. You must keep in mind when you make a payment on the debt, you are claiming it, and the clock resets on the statute of limitations. This means, you guessed it, the creditors can legally come after you again.
You should consider attempting to settle your debt with your creditors. This means you are offering to pay them a certain amount that is below what you owe, but you are offering to pay it all at one time. Creditors would rather have some money than no money, and while it takes significant back and forth, you may be able to strike a deal. Get this agreement in writing. Do not send any money until you have it all outlined in writing. Creditors are not your friends, and they are not going to do you any favors.
What If I Do Not Think the Debt is Mine?
Creditors will attempt to get money from just about anyone. They are not as concerned if they have the proper person or not. Debts get sold many times, and by the time it reaches collections, it has mostly been sold. This means that the creditor may not have all the correct information. If you do not recognize a debt or think it is yours, read the debt validation letter and find out all the information you can about the debt. If you do not believe it is yours, you can challenge the debt.
Where Can I Find Additional Debt Help?
This can all be incredibly confusing, especially when you are not sure which debt is yours. If you have been through a separation and divorce recently, there may be some uncertainly if the debt is yours or your ex-spouse. It may be hard for you to keep track of your own debt and start dates. Goalry can help you keep it all straight with a debt tracker. Our Goalry site is designed to help with all of your financial needs and keep you on track with budgeting and paying the debt. Goalry has a debt tracker app that helps you stay on target with paying down your debt faster.
Conclusion
The most important takeaway for you is to understand what the statute of limitations on debt is and to know that does not mean it no longer becomes your debt. When you do not pay off your debt, it can haunt you for a long time, long after the collectors stop harassing you. You should always work towards a plan for paying off your debt while understanding your legal rights.