What Can Restart the Debt Statute of Limitations?
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. Creditors and collectors can still 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.
The specific statute of limitations ranges from 3 to 15 years depending on the type of debt - e.g. a credit card or a loan - and the state where the debt was incurred or where you currently reside. The clock on the statute of limitations period usually starts ticking on the date of last activity on the account, but could be later than that depending on any activity you've done with the account.
The statute of limitations will continue to run as long as you don't take any action on your account. However, you can restart the statute of limitations, even by accident.
What Can Restart the Statute of Limitations?
Certain actions can restart the debt statute of limitations on a dormant account. It's important to know this so you don't accidentally give new life to an old debt. You can restart the statute of limitations on a debt by:
- acknowledging that you owe the debt
- making a payment
- entering a payment plan
- making an agreement to pay
- making a charge on the account
- accepting a settlement offer
If the clock on the statute of limitations restarts, it starts back at zero. This 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.
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 not willing and able 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 time period, not even a payment on the account.
Additionally, the "last updated" date on your credit report could indicate the last date you made a payment or the last time the creditor updated your records with the credit bureau. It won't show that any verbal agreements you made with a creditor or debt collector.
Because the statute of limitations can vary from 3 to 15 years depending on your state, some debts may fall off your credit report before the statute of limitations has expired. In some cases, debts may still be on your credit report after the statute of limitations has expired.
You largely have to rely on your own records to help you keep up with the statute of limitations on a debt. Keep track of the dates of payments and communications with your debts so you'll be more aware of the statute of limitations timing.
Some debt collectors may let you know that a 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.
Federal Trade Commission. "Time-Barred Debts." Accessed Nov. 30, 2019.
Legal Information Institute. “15 U.S. Code § 1681c. Requirements Relating to Information Contained in Consumer Reports.” Accessed Nov. 30, 2019.
Experian. "How Often is a Credit Report Updated?" Accessed Nov. 30, 2019.
Legal Information Institute. "15 U.S. Code § 1692e. False or Misleading Representations." Accessed Nov. 30, 2019.