Each of your debts has a statute of limitations, which is the amount of time the creditor can use the court to force you to pay a debt. After the statute of limitations has expired on a debt, it is no longer legally enforceable—unless you restart the statute of limitations.
Keep reading to learn the ways statutes of limitations can be restarted, and how to avoid triggering these situations.
How Long Is the Statute of Limitations?
The specific statute of limitations will depend on the state in which you live, as well as the state in which you incurred the debt. It's best to consult an attorney who specializes in debt law in your area, but most states impose a statute of limitations of between three and six years.
The clock on the statute of limitations period usually starts ticking on the date of the last activity on the account. It could be later than that, depending on the type of activity you've done most recently. The statute of limitations will continue to run as long as you don't take any action on your account.
Even after the statute of limitations has been reached, creditors and collectors can still attempt to collect on old debts by calling you and sending letters. However, if you're sued for a past-due debt, the expired statute of limitations can be used as a defense in court to avoid a lawsuit judgment.
What Can Restart the Statute of Limitations?
Certain actions can restart the debt statute of limitations on a dormant account, even if it's done by accident. If you're hoping to reach the statute of limitations, it's important to know exactly what actions can give new life to old debt. In general, you revive the debt anytime you pay, agree to pay, or even acknowledge the debt account. This could include:
- Making a payment for any amount
- Entering a payment plan
- Accepting a settlement offer
- Agreeing to pay off some of the debt
- Acknowledging that you owe a debt
- Making a new charge on the same account
If the clock on the statute of limitations restarts, it starts back at zero, and it applies to the whole debt balance. This time reset gives the creditor or collector more time to use the court to force you to pay the debt. You won't receive a notification that the statute has restarted, but creditors, who keep notes on your account, may know that you've done something to restart the clock on your debt (even if they don't let you know right away).
Proceed with caution when you're communicating with a creditor or debt collector about your debt. They may try to get you to say or do something that would restart the statute of limitations. If you're unwilling or unable to pay a debt, sometimes it may be better to avoid speaking with creditors about a debt.
Statute of Limitations and Credit Reporting
The credit reporting time limit is generally independent of the statute of limitations. You can't rely on your credit report to keep up with the statute of limitations on your debt. Negative information can only remain on your credit report for seven years, and nothing can restart this period, not even a payment on the account. Credit reports also won't track any communication or verbal agreements you made with a creditor or debt collector.
While the average statute of limitations is about six years or less, some states have much longer statutes of limitations. Depending on your state, some debts may fall off your credit report before the statute of limitations has expired. In other cases, debts may still be on your credit report after the statute of limitations has expired.
You largely have to rely on your records to help you keep up with the statute of limitations on a debt. Keep track of the dates of payments and communications about your debts. This will help you be more aware of the statute of limitations timing.
Some debt collectors may let you know that debt is beyond the statute of limitations and no longer legally enforceable. If they don't give you this information, you can ask. The debt collector isn't required to answer, but if they choose to answer, they're required to answer truthfully. This is a precarious conversation to have though—you must walk a fine line between asking about the debt and admitting you owe it.