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Statute of Limitations on
Debt Collection
*Attention* Always consult
with a qualified attorney for matters that relate to you.
The statute of limitations relates to a
creditors right to sue to collect money. The original creditor
is mandated by federal law, to charge-off an account when no
payments have been received for 180 days.
That date is referred to as the ‘Date of Last Activity (DLA)’
and reported as such, to the credit reporting agencies by the
creditor.
The DLA determines two critical issues that you should be aware
of:
(NOTE:
Texas allows the date to start when
you last make a payment, it can ONLY be re-started if the
account is brought current)
-
It starts and stops the seven
year clock on your credit files.
-
It starts and stops the
statute of limitations for taking legal action in your state
by any subsequent owner of the account.
Many, many bottom-feeder, scavenger debt
collectors file suit on debts that are past the statute of
limitations. These are commonly referred to as ‘Time Barred
Debts.’ A lot of consumers, unaware that the statutes have
expired, take a default judgment on debts they no longer may
legally owe. A default judgment has value to a scavenger as they
know the consumer can no longer raise any legal claims (in most
cases) and collections are easier to attain.
If you are ever unsure of what the DLA is, get
copies of your credit reports direct from the three credit
bureaus, (Credit
Bureaus) and look at the date of last activity as
stated by the original creditor. I always recommend that you
hold on to those credit reports for at least five years as many
of the bottom-feeders are known to change the DLA to inflate
their portfolios.’ A credit report is an excellent resource
should legal actions be commenced against the bottom-feeder.
| |
|
Statute of
Limitations on Debt - in Years |
|
State
|
Oral
Agreements
|
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
|
?
|
|
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
|
|
Regarding AZ and Credit
Cards
Click Here
Credit cards are generally
considered open accounts.
The
Federal Truth in Lending Act, Section 127
talks at length about credit cards as open
accounts. However I have received some
information recently indicating that some
courts have ruled that credit cards are
written accounts. This
area of the law seems to be fluid. Meaning
that what your court rules may be based upon
what evidence is presented and other
factors.
While the Federal Truth in Lending Act is
written in legal terms, meaning good luck
trying to read it, the
The State of New Hampshire’s Department of
Justice's Sourcebook has a very readable
definition, check the second paragraph, of
why credit card accounts are open-ended.
In most states, credit cards
are considered Open Accounts. A written contract would be an
auto loan, signature loan or installment agreement. A judgment
after a lawsuit changes the rules and results in a a separate
Statute Of Limitations, which you can
find here.
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