Debt collection statutes of limitation by state

September 19, 2012 | By

Knowing the debt collection statutes can assist in negotiating debt!

In addition to credit reporting statutes of limitation, there are statutes of limitation that apply to debt collections, in terms of how long a creditor has to collect on a debt using a lawsuit. State laws will vary on debt collection, depending on the type of account. There are four types:

  1. Oral contract: Verbal agreement. This can include your word, the creditor’s word, or anyone who witnessed it. Harder to prove but is legally binding in most states.
  2. Written contract: Signed document promising to pay.
  3. Promissory note: A written contract with additional provisions; usually used for the purchase of real property. Notes can be sold to a third party.
  4. Open-ended account: Revolving lines of credit and credit cards. May be sold to a third party.

Most states fall within a three- to six-year statute of limitations range for collection, and if a debt is outside of the state’s limit, then it is no longer collectible and is considered junk debt. Would a debtor still owe the money? Yes, but it isn’t collectible through civil action. Once a debt is no longer reported on a credit report and is outside the collection statute of limitations, the debtor is off the hook unless the debt is for a tax lien, student loan, or child support. Some states may even have additional categories of debts that can be collected indefinitely.

For examples of variations in collection statutes, one doesn’t have to look very hard. In Oregon the statute of limitation is six years for all four types of debt, while in California it’s four for all types of contracts except oral, for which it’s two. Other states have additional quirks in the law. For instance, whereas Ohio and Kentucky both deem credit card contracts as written, some states view them as oral.38

A debt that's beyond the statute of limitations is known as time-barred debt, and a creditor/collector may attempt to this debt anyway. If you’re served a summons under those circumstances, don’t ignore it. File an answer (or show up to court if it’s small claims) and present proof that the period for collection on the debt has expired. Also consider legal action under the FDCPA.

Running Time Reset, Signed Under Seal, and other Anomalies

While state laws specify time frames for collection actions, some can actually be reset in some states. The debt collection statute of limitation can be reset by payment or even by a simple acknowledgment that a debt is owed in some states. Certain types of debts may also have different rules for collection, and this includes but is not limited to:

  • debts signed under seal (the word "Seal" will be found near the signees signature block);
  • medical debts;
  • rent payments;
  • contract for sale;
  • judgments;
  • sales and services that fall under the Uniform Commercial Code (UCC)

Some of these peculiarities are good, and some not so much. Arkansas, for example, has a cap on medical debts of of two years. Ohio has a limit of only two years on forclosure deficits! But if you happen to live in Idaho, Montana, Arkansas, Maryland, Nebraska, New Mexico, North Carolina, or West Virginia, then making a partial payment can rest the statute of limitation. Still other states have tolling provisions, where the SOL is stopped in certain cases, such as when a debtor leaves the state. Appendix A not only lists standard Debt Collection Statutes of Limitation by State, but also addresses many of these peculiarities.

Paying any amount of money—even a nickel—can hurt. Running can hurt. Failing to obtain a bankruptcy discharge39 after filing can hurt. Acknowledging that the money is owed can hurt. This is a tricky business, since in many cases you’re damned if you do and damned if you don’t. And yet there are some ways around these extension pitfalls, explained in BestCredit: How to Win the Credit Game.40

Tip: Even if a debt collection statute is reset, the credit reporting running time cannot be reset.

 

Debt Collection Statute of Limitations (in years)1

State

Oral
Agreements

Written
Contracts

Promissory
Notes

Open
Accounts

Alabama

6

6

6

3

Alaska

6

3

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

6

Oklahoma

3

5

5

3

Oregon

6

6

6

6

Pennsylvania

4

4

4

4

Rhode Island

15

10

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

 

Additional State-specific rules:

Alabama

  • Signed under seal: 10 years.

Alaska

  • Signed under seal: 10 years.
  • Real property: 10 years.
  • Contract for sale: 4 years

Arizona

  • Written contracts: 6 years (from date creditor could have sued).
  • Arizona judgments may be renewed five years of the date of the judgment.

Arkansas

  • Written contracts: 5 years; partial payment or written acknowledgement of default stops the statute of limitation indefinately.
  • Breach of any contract for the sale of goods: 4 years.
  • Medical debts: 2 years from date services were performed; partial payment will reset.

California

  • Written agreements: 4 years, calculated from the date of breach.
  • Oral agreements: 2 years.
  • The statute of limitation is reset only for payments made after the original SOL has expired.

Colorado

  • Domestic and foreign judgments: 6 years, renewable indefinately each six years. (child support doesn't require renewal.)

Delaware

  • Sales under the UCC: 4 years
  • Signed under seal: No limitation.

District of Columbia

  • Open accounts: 3 years from the date of last payment or last charge on a credit card. An oral promise to pay will reset the SOL.
  • Signed under seal: 12 years.
  • Sales of goods under the UCC: 4 years.

Florida

  • Libel, slander, or unpaid wages: 2 years.
  • Judgments: 20 years. Liens on real property must be renewed in 10 years.
  • Tolling: Written contracts have their SOL tolled for any period during which the debtor is absent from the state and each time a voluntary payment is made.

Georgia

  • Breach of any contract for sale: 4 years.
  • Written contract: 6 years; from when it becomes due and payable and the six (6) year period runs from the date of last payment.
  • Open account: payment cannot reset the SOL.
  • Bonds or other instruments under seal, 20 years. To be considered under seal, it must be stated in the body of the instrument.

Hawaii

  • Breach of contract for sale under the UCC: 4 years.
  • Judgments: 10 years, renewable for 10.
  • Tolling: SOL's are tolled for a period in which the debtor is absent from the state.

Idaho

  • Breach of contract for sale under the UCC: 4 years.
  • Oral contracts: 4 years. A written acknowledgement or new promise, or any payment resets the SOL.
  • Judgments: 5 years but may be renewed for another five-year period.
  • Tolling: All actions are tolled during the time of a person's absence from the state or during the time that an action is stayed by injunction or by statutory prohibition action.

Illinois

  • Breach of contract for sale under the UCC: 4 years.
  • Open account or unwritten contract: 5 years.
  • Foreign judgments are the same time as allowed by the laws of the foreign jurisdiction.
  • Tolling: A person's absence from the state or during the time that an action is stayed by injunction, court order or by statutory prohibition tolls the time limit.
  • Non Sufficient Funds (NSF or Payment of Negotiable Instruments) checks: 3 years of the dishonor of the draft or 10 years after the date of the draft, whichever expired first.

Indiana

  • Breach of contract for sale under UCC: 4 years.
  • Unwritten accounts or contracts and promissory notes or written contracts for payment of money executed after August 31, 1982: 6 years.
  • Written contracts unrelated to the payment of money: 10 years.
  • Written acknowledgement or new promise signed by the debtor, or any voluntary payment on a debt, is sufficient evidence to cause the relevant statute of limitations to begin running anew.
  • Judgments: 10 years unless renewed.

Iowa

  • Judgments: 20 years. May be renewed between the 9th and 10th year.

Kansas

  • Expressed or implied but not written contracts, obligations or liabilities: 3 years.

Kentucky

  • Recovery of real property: 15 years.
  • Judgment, contract or bond: 15 years.
  • Breach of sales contract: 4 years.
  • Action on check, draft or bill of exchange: 5 years.
  • Actions not provided for by statute: 10 years.

Louisiana

  • Judgments: 10 years, renewable for 10 if done so within 10.

Maine

  • Signed under seal: 20 years.
  • Judgments: 20 years.

Maryland

  • Breach of contract for goods and services under UCC: 4 years after the cause of action, even if the aggrieved party is unaware of the breach.
  • Financing statement: 12 years; a continuation statement may be filed by a secured party 6 months prior to end of 12 year period.
  • The 3 year SOL is reset by written agreement, orally, or by payment.

Massachusetts

  • Signed under seal and debt instruments issued by banks: 20 years.
  • Judgments: 20 Years.
  • Consumer Protection Actions: 4 Years.
  • Recovery of Property: 3 Years.
  • Probate Claims: 1 Year from date of death.
  • Claims on mortgage notes following foreclosure or on claims junior to a foreclosed mortgage: 2 Years.

Michigan

  • Contract for sale of goods under UCC: 4 years.
  • Judgments: 10 years, but are renewable by action for another 10 years.
  • Provisions exist for another state's SOL to apply, check statutes carefully.

Minnesota

  • Breach of contract for sale under the UCC: 4 years.
  • Tolling: New written acknowledgement or payment tolls the statute of limitations for the debt.
  • Judgments: 10 years.

Mississippi

  • Judgment liens on real estate: 7 years, but renewable prior to expiration.
  • Deficiency claims: 1 year from sale of collateral.
  • Construction liens: 1 year from date lien filed.

Missouri

  • Sale of goods under the UCC: 4 years.

Montana

  • Support for a spouse, child or indigent parent: 2 years.
  • Obligation or liability, other than a contract, account or promise not based on a written instrument: 3 years.
  • Relief on the grounds of fraud or mistake: 2 years.
  • Debts may be reset by written acknowledgement or any payment on a debt.
  • Judgment or decree of any U.S. court: 10 years. Judgments rendered in a court not of record: 6 years.

Nebraska

  • Real estate or foreclosure mortgage actions; product liability; 10 years.
  • Foreign judgments, contract or promise in writing, express or implied: 5 Years.
  • Liability created by federal statute with no other limitation: 3 years.
  • Malpractice: 2 Years.
  • Debt reset: the SOL is reset by partial payment or written acknowledgement of debt.

Nevada

  • Property damage: 3 years.
  • Personal injury: 2 years.

New Hampshire

  • Contracts for the sale of goods under UCC: 4 years.
  • Judgments, recognizance, and contracts under seal: 20 years.
  • Notes secured by a mortgage: 20 years and applies even if the mortgage has been foreclosed.
  • Tolling: Payment on an account tolls the SOL.
  • Installment loans allow for separate measurement of the statutory period as each separate payment comes due, unless the loan has been accelerated.

New Jersey

  • Conversion of an instrument for money: 3 years.
  • Sale of goods under the UCC: 4-years.
  • Real or personal property damage, recovery and contracts not under seal: 6 years.
  • Demand Notes when no demand is made: 10 years. If demand made: 6 years from date of demand.
  • Obligations under seal for the payment of money only, except bank, merchant, finance company or other financial institution: 16 years.
  • Unpaid rent if lease agreement is under seal, 16 years.
  • Real estate and judgments: 20 years; judgments are renewable; foreign judgments: 20 years unless period in originating jurisdiction is less.
  • Unaccepted drafts: 3 years from date of dishonor or 10 years from date of draft, whichever expires first.

New Mexico

  • Contract in writing for the sale of personal property: 4 years.
  • All other creditor-debtor transactions are 4 years after accrual of the right to sue.
  • SOL is reset with an acknowledgment or payment.
  • Judgments: 14 years.

New York

  • Bonds, money judgments, real property, by grantee of state for real property, support, alimony or maintenance: 20 years.
  • Possession necessary to recover real property, annulment of letters patent, and mortgage redemption: 10 years.
  • Contract; on sealed instrument; on bond or note, and mortgage upon real property; by state based on misappropriation of public property; based on mistake; by corporation against director, officer or stockholder; based on fraud: 6 years.
  • Residential rent overcharge and action by a victim of a criminal offense: 4 years.
  • Non-payment of money collected on execution; for penalty created by statute; to recover chattel; for injury to property; for personal injury; for malpractice other than medical or dental malpractice; to annul a marriage on the ground of fraud: 3 years.
  • Contracts for Sale: 4 years. A cause of action accrues when the breach occurs, regardless of the aggrieved party`s lack of knowledge of the breach.
  • Contract for lease of goods: 4 years.

North Carolina

  • Contract and sale of personal property under seal: 10 years.
  • SOL Reset on open accounts if payment is made.
  • Judgments: 10 years, renewable. Partial payments don't affect the ten-year limitation on enforcing or renewing judgments.
  • Partial payment by one debtor does not renew the statute of limitations as against any a co-debtor unless that co-debtor agreed to, authorized or ratified the partial payment.
  • Bankruptcy, Death or Disability: Filing of a bankruptcy tolls the statute of limitations for the enforcement of contracts and judgments.
  • The death, minority, disability or incompetence of a debtor also tolls the limitation period until such time as a personal representative of the estate or a guardian of the incompetent or minor is appointed.

North Dakota

  • Breach of contract for sale under UCC: 4 years.
  • SOL is reset with a new written acknowledgement or promise or voluntary payment.
  • Judgments: 10 years.

Ohio

  • Note payable at a definite time: 6 years.
  • Demand note: 6 years after the date on which demand is made or 10 years if no demand is made and neither principal nor interest has been paid over that time.
  • Dishonored check or draft: 3 years after dishonor.
  • Forclosure deficits not collectable after 2 years.
  • Judgements: 5 years, renewable indefinately so long as it isn't dormant for more than 21 years.

Oklahoma

  • Attachments: 5 Years.
  • Domestic Judgment: 5 Years.
  • Foreign Judgment: 3 Years.

Oregon

  • Unlawful trade practices: 1 year.
  • No SOL exists for a cause of action brought as a counterclaim to an action by the seller.
  • Judgment: 10 years, renewable once.

Pennsylvania

  • Signed under seal: 20 years.
  • Sale of goods under UCC: 4 years.
  • Negotiable instruments: 6 years.

Rhode Island

  • Sales agreement under UCC: 4 years.
  • Contracts or liabilities under seal and judgments: 20 years.
  • Hospital liens: 1 year from payment.
  • Against insurer to enforce repairer's lien: 1 year from payment to insured.
  • Child support for common law father: 6 years.
  • Mechanic's lien: 1 year plus one hundred twenty days.

South Carolina

  • Breach of Contract: 3 years.
  • Partial payment or acknowledgment in writing tolls the SOL.
  • Foreign or domestic judgments: 10 years.

South Dakota

  • Domestic Judgments: 20 Years
  • Foreign Judgments: 10 Years.
  • Claims of Fraud: 6 Years.
  • Sealed Instrument: (except real estate): 20 Years.
  • Actions not otherwise provided for: 10 Years.
  • Sale of Goods: 4 Years.

Tennessee

  • Domestic or foreign judgments: 10 years.

Texas

  • 4-year limitations period for all types of debt. The SOL begins after the day the cause of action accrues.

Utah

  • SOL is reset with a written acknowledgement signed by the debtor.
  • Judgment or decree of any court or State of the United States: 8 years.

Virginia

  • Sale of goods under the UCC: 4 years.
  • Domestic Judgments: 10 years, and renewable to 20 years.
  • Foreign judgments: 10 years.

Vermont

  • Witnessed promissory notes: 14 years.

Washington

  • Accounts receivable: 6 years.
  • Recovery of property and judgments: 10 years.

West Virginia

  • Debt collection SOL is reset if a debtor makes an acknowledgment by a new promise, or voluntarily makes a partial payment on a debt, under circumstances that warrant a clear inference that the debtor recognizes the whole debt.

Wisconsin

  • SOL is tolled with payment, then will start again with last payment or last charge by the debtor, whichever occurs later.

Wyoming

  • Recovery of personal property: 4 years.
  • Dishonor of draft (check): 3 years.
  • Judgments: 21 years. Judgments cannot be revived after twenty-one years unless the party entitled to bring the action was a minor or subject to any other legal disability at the time the judgment became dormant, in this case action may be brought within 15 years after disability ceases. If no execution is issued within 5 years from date of judgment or last execution is issued, the judgment becomes dormant and ceases to operate as a lien. A dormant judgment may be revived in the same manner as prescribed for reviving actions before judgment or by action.

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1 Check your local statutes.

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