A statute of limitations on debt is the period of time a creditor or debt collector can take legal action against a borrower for to collect unpaid debts. Statute of limitations periods vary by state.
Credit accounts that are past the statute of limitations on debt are known as time-barred debts. You’re still required to repay time-barred debts, and they will probably still show up on your credit report and drag down your credit score.
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Every State’s Statutes of Limitations
Here is a breakdown of each state’s statutes of limitations on the different types of debt, and a link to your state attorney general’s office for more information. (If you want to know more about the different types of debt, click here to go directly to that information.)
Can a Debt Collector Take You to Court After Seven Years?
Yes. An expired statute of limitations is never a sure-fire way to avoid court, but in some states, the debt collector will still be able to sue you after seven years. The exact timetable will depend on your state’s laws. As you can see from the table above, in some states it will take 10 to even 20 years for the statute of limitations to expire, depending on the type of debt. And even once the clock runs out, the debt collector could still try to sue you for other reasons.
For example, they might try to:
- Argue that the statute of limitations isn’t applicable
- Argue that the statute of limitations clock isn’t correct
- Try to challenge a debt that originated in a different state with a longer statute of limitations
Statutes of Limitation Don’t Apply to All Types of Debt
Though most debts are covered by a statute of limitations, there are a few exceptions. That means creditors can sue you for these balances no matter how old your accounts are.
- Federal student loans
- State taxes (in some states)
- Child support (in some states)
Pro tip: Be sure to double-check your state’s laws and consider asking a lawyer for help if you aren’t sure whether your debt might be exempt.
Should I Pay Off Debts After the Statute of Limitations Expires?
How you should deal with debts that are past your state’s statute of limitations is complicated. If you’ve let any credit account go delinquent for several years, you will already be facing significant legal, financial and credit score repercussions.
READ MORE: Debt consolidation vs. debt settlement
Dealing with debts that are past the statute of limitations will depend on your financial situation. There are significant legal, financial, and credit-related repercussions to letting a credit account be delinquent for years.
You can’t ignore the problem forever. Though creditors and debt collectors can’t sue you for time-barred debts, they can still attempt to get their money through other means. Your account may also continue to damage your credit score and rack up late fees, penalties and interest.
Pro tip: It’s best to seek legal advice for your situation. Check for a law firm that offers a free consultation.
Types of debt
Each state groups debts into four types with separate rules for each. Here are some of the key differences.
If you borrowed money from someone and promised to repay it, but never wrote down the agreed-upon terms, it’s considered an oral agreement. These usually occur between friends or family.
If you promise to pay a third party in exchange for specific goods and/or services, that’s a written contract. For example, if you sign a contract agreeing to pay $800 for water heater repairs and you fail to pay that bill, the service worker or company can sue you for the balance.
Medical debt is often considered a written contract, but some states have a different statute of limitations specifically for medical bills.
A promise to pay a fixed amount of money under specific situations is considered a promissory note. Installment loans, student loans, auto loans and home loans are considered promissory notes.
Pro tip: It’s also possible to set up a promissory note without a fixed installment structure. For example, you if you borrow money from a friend and issue a promissory note that says you’ll pay them back in a lump sum at a future date.
Open-ended accounts don’t have a fixed repayment term. Credit card debt and home equity lines of credit that assign you a credit limit and allow you to access money on a rolling basis (as long as you make your payments) are key examples.
To learn more about statutes of limitations and how they work, check out this video:
The Bottom Line
Waiting for the statute of limitations to run out on your debt is a risky strategy, but if you have a debt that’s close to the deadline, it could keep you out of court. Still, it will likely take years for your credit score to recover. If you can’t afford to repay your debts, you’re better off considering a different option, like debt consolidation or debt settlement.
No. Recent updates to Regulation F of the Fair Debt Collection Practices Act changed the way this works. As of November 30, 2021, lenders can no longer threaten lawsuits or take you to court for any debt that’s passed the statute of limitations.
However, there are still ways debt collectors could legally challenge certain time-barred debts.
Reaching the statute of limitations requires years of inactivity on your account, which can drastically hurt your credit score.
If you miss a payment, most lenders report you as delinquent to the credit bureaus after 30 days. At that point, it will show up on your credit report and remain there for seven years.
The longer you wait to pay your account, the more damage it’ll do to your score. Because your payment history is worth such a significant part of your score (35% under FICO), the penalty for defaulting is always significant.
Even if the statute of limitations has passed, a debt collector can still pursue old debts indefinitely. The law only prevents them from initiating a lawsuit against you. They are still allowed to attempt to recover their money.
In most states, debt collection agencies can and will try to attempt to pressure you into paying through other means. For example, you may still get phone calls intended to intimidate you into paying. However, the actions debt collectors can take are limited by the federal Fair Debt Collection Practices Act (FDCPA). For example, calling you after hours is prohibited.
The Federal Trade Commission has provided a helpful guide on how the FDCPA protects you from aggressive debt collectors.