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Debt Collection Statute of Limitations

Debt Collection Statute of Limitations

Debt collection statute of limitations is a powerful tool to fight against unethical practices adopted by debt collectors. Awareness about your rights ensures that you are not being made to pay debts that you are not legally entitled to pay...
Rahul Pandita
Have you been hounded by a debt collector agency for a debt that you thought never existed. Or are you finding yourself being threatened for a debt which you thought was written off years ago. If this is the case, it is very important for you to know about the statute of limitations. A debt collection statute of limitations is the time period in which a debt collector can sue debtors for non-payment of debts. Once the statute of limitations has expired, a debt collector cannot sue you for non-payment. One important thing to note down is that the debt collectors cannot sue you after statute of limitations on debt has expired, but they can still make attempts to collect debts from you.

Types of Debt Contracts

Before we go ahead and check the statute of limitations in various states of US, let us take a look at the different types of contracts.
  • Oral contract : An oral contract is a contract in which there is no written documentation of the agreement between two parties. Though it is legal, it is very difficult to prove in court in case of a dispute.
  • Written contract : You and your creditor reach and agreement and put it in the form of a written document which is signed by each of you. This is one of the widely used contracts in US.
  • Promissory note : A promissory note is different from a written contract as it also includes specific repayment details in writing and it is legally binding.
  • Open ended contract : These are the contracts which have varying lines of credit, such as your credit card.
Let us take a look at the state wise statute of limitations time period.

Statute of Limitations by State

STATE WRITTEN (in years) ORAL (in years)
ALABAMA 6 6
ALASKA 3 3
ARIZONA 6 3
ARKANSAS 5 5
CALIFORNIA 4 2
COLORADO 6 6
CONNECTICUT 6 3
DELAWARE 3 3
DISTRICT OF COLUMBIA 3 3
FLORIDA 5 4
GEORGIA 6 4
HAWAII 6 6
IDAHO 5 4
ILLINOIS 10 5
INDIANA 10 6
IOWA 10 5
KANSAS 5 3
KENTUCKY 15 5
LOUISIANA 10 10
MAINE 6 6
MARYLAND 3 3
MASSACHUSETTS 6 6
MICHIGAN 6 6
MINNESOTA 6 6
MISSISSIPPI 3 3
MISSOURI 10 10
MONTANA 8 5
NEBRASKA 5 4
NEVADA 6 4
NEW HAMPSHIRE 3 3
NEW JERSEY 6 6
NEW MEXICO 6 4
NEW YORK 6 6
NORTH CAROLINA 3 3
NORTH DAKOTA 6 6
OHIO 15 6
OKLAHOMA 5 3
OREGON 6 6
PENNSYLVANIA 4 4
RHODE ISLAND 10 10
SOUTH CAROLINA 3 3
SOUTH DAKOTA 6 6
TENNESSEE 6 6
TEXAS 4 4
UTAH 6 4
VERMONT 6 6
VIRGINIA 5 3
WASHINGTON 6 3
WEST VIRGINIA 10 5
WISCONSIN 6 6
WYOMING 10 8

In the past decade, a new trend has emerged in which the debt collectors buy old debt accounts and then go and use every trick in the book so that the consumers pay up. They will either threaten you by telling you that they are going to file a court case, or may in fact go ahead and file one. Apart from this some of these debt collectors also promise to take off negative points off your credit rating, if you make a minimal payment. Another way they can coax you into paying is by making numerous phone calls and using profanity. Due to these reasons a lot of customers end up paying money for debts they do not owe or on which statute of limitations has expired. We will take a look at some of the tips on what to do in case you find yourself in this kind of situation.

A Few Tips
  • The first and foremost thing that you need to do is to keep an eye on your credit report to check for any discrepancies. Ensure that none of your old debts is reflected on your credit report and if you find any, do take immediate action against it.
  • One of the most common mistakes people make when they are being harassed is making a minimal payment. This starts the account activity all over again and makes the statute of limitations null and void. So, one should first demand proof from the agency, like the credit card reports, etc., and take legal advice before making any kind of payment.
  • Read all the terms and conditions in the Fair Debt Collection Practices Act about what are the things that a creditor hasn't got the right to do. If you feel that the creditor is crossing the line, you can first verbally warn him and then take legal action.
These were some of the tips that you should keep in mind when being asked to pay for an old debt. The statute of limitations is undoubtedly helpful and awareness about it can ensure that you are not being harassed for something that you do not owe.