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Your State’s Statute of Limitations governs the amount of time a creditor or collection agency
can sue you for a debt. After the statute of limitations has run, the original creditor or the
collection agency cannot bring a lawsuit against you for the debt. The debt becomes
uncollectible.
Review Your State’s Statute of Limitations:
Debt Settlement may not be necessary
by Lisa Phillips
Statute of Limitations varies for each State and depends on the type of debt:

Oral Contract:  An oral agreement or “handshake agreement” to pay money loaned to you.

Written Contract:  Written agreement to pay a loan according to the terms written in the contract
such as an auto loan.

Promissory Note: A written contract that explicitly states scheduled payments and interest on a
loan much like a mortgage loan.

Open-ended Accounts: Revolving lines of credit with varying balances such as credit cards.

How to Calculate the Statute of Limitations

To calculate the statute of limitations start with the date you made your last payment (no other
payments have been made on that account since then). For example:

  • You made a payment on an account on June 10, 2004 and have made no other subsequent
    payments.

  • Let's say you live in California where the statute of limitations is 4 years on "open-ended
    accounts."

  • Now add 4 years to the June 10, 2004.

  • The statute of limitations runs June 10, 2008.

  • The creditor nor the collection agency can sue you for this debt.

What if you have moved to another State

If you incurred a debt in one state but moved to another state, the statute of limitations may not
be the same for each state. In this case, the creditor or collection agency can choose to use the
state with the longer statute.

Re-Starting the Statute of Limitations Date

The statute of limitations can be restarted, even if has expired, in some states simply by making a
payment on the old debt or just by acknowledging that you owe the debt. It may be wise to ignore
collection agency phone calls and write a letter demanding the debt collector cease all telephonic
contact with you. Always send the letter via certified mail, return receipt. Be sure to state in the
letter that you are not acknowledging you owe the debt.

Credit Reporting Agencies and Negative Marks

According to the FCRA negative marks can remain in your credit files for 7 years, after which time
the negative mark and the related collection must be deleted. The length of time starts from the
time you were late or the late payment went into collection. It does not start from the last time
you made a payment on the account. Some collection agencies will fraudulently update their
reporting status in order to keep the account active thereby extending the time the account
appears on your report. If this occurs dispute it with the credit reporting agencies and they have
to honor the original 7 year reporting date.

State Statutes vs. Credit Reporting Agencies

Once the 7-year mark has been reached negative entries will drop off your credit report. This is not
the same thing as statute of limitations. Even though a debt may no longer legally appear on your
credit reports after 7 years, you could still be sued for the debt if the statute of limitations for your
debt in your state has not run.

Let Sleeping Dogs Lie

Be careful about disputing old debts with the credit reporting agencies. You could bring the debt
back to life by disputing it and awaken the creditors’ interest in collecting the debt. You could get
sued and be required to pay the debt which would be even worse for your credit score. The debt
would appear recent and a recent negative is far more detrimental than an older negative. You can
leave the debt alone and it may drop off in a few years. If the statute of limitations is well past,
you can attempt to get it deleted from your credit reports but be careful not to do anything that
may re-start the statute.

Be careful when Contacting Old Creditors

Some states have a provision that extends the statute of limitations if you make a payment on an
old debt or acknowledge that you owe the debt. A good faith effort to pay or settle an old debt
may turn into a huge negative mark on your credit report which could potentially be reported for
another seven years. Always negotiate deletions when paying old debts.

Know who you are Dealing With

The original creditor may have written off as a loss or even sold the debt for pennies on the dollar
to a collection agency. Collection agencies can be unscrupulous in collecting a debt. If you decide
to pay a collection agency, always negotiate a deletion and never pay what they are asking for.
Negotiate a reasonable settlement without ever acknowledging you owe the debt.
See Debt Settlement for more information. If you are dealing with the original creditor you can still
negotiate a favorable settlement but you may not be able to negotiate a full deletion. Request the
original creditor report the debt as “paid as agreed”. If the credit report says “settled” it’s often
worse than the original negative mark and will not improve your credit scores.

Get a Free Credit Report Instantly Online!

Order your free credit reports to calculate the statute of limitations on your debt.
Statute of Limitations
State
 Oral
Agreement
 Written
Contracts
 Promissory
Notes
 Open Accounts
Alabama
 6
 6
 6
 3
Alaska
 6
 6
 6
 6
Arizona
 3
 6
 5
 3
Arkansas
 3
 5
 6
 3
California
 2
 4
 4
 4
Colorado
 6
 6
 6
 6
Connecticut
 3
 6
 6
 6
Delaware
 3
 3
 6
 3
D.C.
 3
 3
 3
 3
Florida
 4
 5
 5
 4
Georgia
 4
 6
 6
 4
Hawaii
 6
 6
 6
 6
Idaho
 4
 5
 10
 4
Illinois
 5
 10
 6
 5
Indiana
 6
 10
 10
 6
Iowa
 5
 10
 5
 5
Kansas
 3
 5
 5
 3
Kentucky
 5
 15
 15
 5
Louisiana
 10
 10
 10
 3
Maine
 6
 6
 6
 6
Maryland
 3
 3
 6
 3
Massachusetts
 6
 6
 6
 6
Michigan
 6
 6
 6
 6
Minnesota
 6
 6
 6
 6
Mississippi
 3
 3
 3
 3
Missouri
 5
 10
 10
 5
Montana
 5
 8
 8
 5
Nebraska
 4
 5
 6
 4
Nevada
 4
 6
 3
 4
New Hampshire
 3
 3
 6
 3
New Jersey
 6
 6
 6
 6
New Mexico
 4
 6
 6
 4
New York
 6
 6
 6
 6
North Carolina
 3
 3
 5
 3
North Dakota
 6
 6
 6
 6
Ohio
 6
 15
 15
 4
Oklahoma
 3
 5
 5
 3
Oregon
 6
 6
 6
 6
Pennsylvania
 4
 6
 4
 6
Rhode Island
 15
 15
 10
 10
South Carolina
 10
 10
 3
 3
South Dakota
 6
 6
 6
 6
Tennessee
 6
 6
 6
 6
Texas
 4
 4
 4
 4
Utah
 4
 6
 6
 4
Vermont
 6
 6
 5
 6
Virginia
 3
 5
 6
 3
Washington
 3
 6
 6
 3
West Virginia
 5
 10
 6
 5
Wisconsin
 6
 6
 10
 6
Wyoming
 8
 10
 10
 8
About Us
This does not mean a creditor or debt collector
cannot attempt to collect the debt. It just means
you cannot be taken to court or sued after the
statute of limitations has run.

Do not get the Statute of Limitations (SOL)
confused with FRCA reporting rules and how long
negative information will stay on your credit
reports.

Even though you cannot be sued for debt after
the SOL has passed, the debt can still be on
your credit report. Under FCRA Rules, credit
reporting agencies may report a negative debt
up to seven years and bankruptcies, judgments
and tax liens up to ten years.
According to the law, it is your right to dispute.
 
Disputes
Tips for Disputing Negative information  in your
Credit Files

Debt Validation
How to halt the collection process by requesting
a collection agency to validate your debt

Collection Agencies
Information on Effectively Dealing with Collection
Agencies

Get Deletions
Request deletions when paying a negative
account. Paid collections do not improve your
credit scores.
More Resources
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