Debt Statute of Limitations FAQ
Answering 8 Common Questions
Being contacted about an old debt can be unnerving, whether it's for an old credit card or loan. If and when that call comes, it's important to know your rights.
Even though debt collectors and creditors can contact you about a debt as long as you still owe it, they can only sue you for a certain amount of time. That amount of time is known as the statute of limitations. Here are answers to some of the most frequently asked questions about the statute of limitations on debt.
What's the Statute of Limitations for My Debt?
Each state has its own laws on the statute of limitations for debt, and they differ depending on the type of account. Credit cards and loans, for example, are different types of debt and may have different statutes of limitations from each other. Some states' limits are as low as three years, while many others are as high as six or even 10 years.
Do I Still Owe a Debt After the Statute of Limitations Has Passed?
The statute of limitations expiring doesn't erase the debt, it only limits the creditor's ability to use the court to force you to pay the debt. So, you technically still owe a debt, even if the statute of limitations has passed. There are only three ways to erase a debt: paying it, having it canceled, or having it discharged in bankruptcy.
Can a Collector Contact Me After the Statute of Limitations Has Passed?
The Fair Debt Collection Act sets the rules for when a debt collector can and cannot contact you. Debt collectors can still pursue you for a debt after the statute of limitations has passed. This may include sending letters, calling you, and listing the debt on your credit report if it's within the credit reporting time limit. You can stop debt collectors from calling you by sending a written cease and desist letter.
Can I Be Sued for a Debt After the Statute of Limitations Has Passed?
The statute of limitations restricts the time a creditor or collector can use the court to force you to pay a debt. Some debt collectors may sue you even after the statute of limitations has passed. Their records may be different from yours or they may hope you're unable to prove that the debt is no longer legally enforceable.
If you're sued for a debt after the statute of limitations, show up in court to defend your case with your proof that the time period has passed. Seek help from a legal professional for additional protection. Note that if you ignore a lawsuit summons, the creditor may win a default judgment against you.
When Does the Statute of Limitations Clock Start?
The most confusing thing about the statute of limitations is figuring out when the clock starts ticking. You say one date, the collector says another. Here's the rule: The clock starts on the last date of activity on the account. This could be the last time you made a payment, payment arrangement, or acknowledged ownership of the debt. Note that the last date of activity on an account regarding the statute of limitations is different from the last date of activity for credit reporting purposes.
What Can Restart the Debt Statute of Limitations Clock?
Once the clock for the statute of limitations has started, you don't want to do something to restart it. If that happens, the debt collector gets much more time to sue you for the debt. The statute of limitations can restart if you acknowledge ownership of the debt, make a payment, or enter a payment agreement.
Why Is an Expired Debt Still on My Credit Report?
You might check your credit report and notice that a debt with an expired statute of limitations is still listed. In some cases, it's perfectly legal. The credit reporting time limit, which is seven years for most debts, may be longer than the statute of limitations in your state.
How Do I Remove a Debt from My Credit Report After the Statute of Limitations Has Passed?
The Fair Credit Reporting Act allows you to have old debts removed from your credit report when these debts are inaccurate. The expiration of the statute of limitations isn't enough cause to dispute a debt from your credit report.
U.S. Federal Trade Commission. "Time-Barred Debts." Accessed Feb. 6, 2020.
U.S. Federal Trade Commission. "Fair Debt Collection Practices Act." Accessed Feb. 6, 2020.
Credit.org. "Complete Guide to the Statute of Limitations on Debt." Accessed Feb. 6, 2020.
FICO. "Errors on Your Credit Report." Accessed Feb. 6, 2020.