The statute of limitations on debt is a rule limiting how long a creditor can sue you for payment on a debt.
All 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.
Generally, state law where you live determines the statute of limitations on specific debts, even if you incurred the debt elsewhere. In some states, the statute of limitations for credit card debt is three years. In others, it’s up to 10.
The rules can vary greatly state to state. In 22 states, for example, the statute of limitations on private student loans is six years. 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.
How to tell if a debt is time-barred
After the statute of limitations on debt passes, the debt is considered “time-barred” and you can’t legally be sued — but collectors may still try.
Your obligation to pay, however, stays on the books.
Your obligation to pay, however, stays on the books. That means that future creditors will see it, which can make it harder for you to get new lines of credit, and the ones you do get will likely have higher interest rates.
“Determining if a debt is past its statute involves looking at what type of debt it is and what statutes are applicable,” says Colin Hector, staff attorney at the Federal Trade Commission. “You need some legal acumen, so you may want to check with legal aid, an attorney or a state’s attorney general office.”
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 legal information but may be hard to reach.
- Local legal aid: Inexpensive, but their attorneys and paralegals are often overbooked and overworked.
- A consumer attorney: Can offer personalized and faster help but at a higher cost.
Getting information from the 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.
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.
If you recognize the debt as yours
Collect all information you have on it, such as the amount, any payments you made and the date of your last payment. This serves as your arsenal against the debt collectors.
Ask the collector two simple questions:
- Is the debt time-barred?
- When was the date of the last payment?
If the debt collectors answer the first question, they’re required by the Fair Debt Collection Practices Act to answer it truthfully. However, they’re not required to answer it at all.
The clock on the statute of limitations starts when an account goes delinquent, typically 30 days after you miss a payment.
If the collector doesn’t answer, ask about the date of the last payment. The clock on the statute of limitations starts when an account goes delinquent, typically 30 days after you miss a payment.
If you haven’t made any payments, the clock may have started when you took out the debt or when it was marked delinquent, depending on your state.
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 within 10 days, 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.
If you don’t recognize the debt
The debt collection industry is notorious for attempting to collect debts from the wrong people. As debts are sold by the original creditor to a third party and possibly sold again, a debt collector will likely have less and less complete information. As a result, you may be contacted to pay a debt that’s not yours at all.
Refer to your own records and the validation letter to clarify any discrepancy. This will help you determine if you should challenge the debt.